2014/2015 Malaysian Tax and Business Booklet PP 13148/07/2013 (032730) www.pwc.com/my

2014/2015
Malaysian Tax and Business Booklet
PP 13148/07/2013 (032730)
www.pwc.com/my
2014/2015
MALAYSIAN
TAX AND BUSINESS BOOKLET
A quick reference guide outlining Malaysian
tax and other business information
The information provided in this booklet is
based on taxation laws and other legislation,
as well as current practices, including
legislative proposals and measures contained
in the 2015 Malaysian Budget
announced on 10 October 2014
This booklet incorporates in coloured italics the 2015 Malaysian Budget
proposals announced on 10 October 2014. These proposals will not
become law until their enactment which is expected to be in early 2015
and may be amended in the course of its passage through Parliament.
This booklet also incorporates in coloured italics some other proposals
announced recently which have not been enacted to date.
This booklet is intended to provide a general guide to the subject matter
and should not be regarded as a basis for ascertaining the liability to tax
in specific circumstances. No responsibility for loss to any person acting
or refraining from acting as a result of any material in this publication can
be accepted by PricewaterhouseCoopers. Recipients should not act on
the basis of this publication without seeking professional advice.
© 2014 PricewaterhouseCoopers. All rights reserved.
"PricewaterhouseCoopers" and/or "PwC" refers to the individual members of
the PricewaterhouseCoopers organisation in Malaysia, each of which is a
separate and independent legal entity. Please see www.pwc.com/structure
for further details.
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CONTENTS
TAX INFORMATION
INCOME TAX
Scope of taxation
Basis of assessment
Self-assessment
Public rulings and advance rulings
1
1
1
1
2
PERSONAL INCOME TAX
Tax residence status of individuals
Rates of tax
Personal reliefs for resident
individuals
Tax rebates for resident individuals
2
2
3
4
EMPLOYMENT INCOME
Derivation
Exemption (short-term employees)
Employees of regional operations
Types of employment income and
valuation
Perquisites
Benefits-in-kind (BIK)
Collection of tax
6
6
6
6
6
7
8
10
CORPORATE INCOME TAX
Residence status
Income tax rates
Collection of tax
Profit distribution
Losses
Group relief
Tax deductions
Transfer pricing
Thin capitalisation
Loan / advances to director
10
10
10
11
12
12
12
12
13
13
13
CAPITAL ALLOWANCES
Industrial buildings
Plant and machinery
Accelerated capital allowances
Additional capital allowances
13
13
14
15
16
5
Disposals
Controlled transfers
Disposals within 2 years
Unabsorbed capital allowances
17
17
17
17
AGRICULTURE ALLOWANCES
17
DOUBLE TAX TREATIES AND
WITHHOLDING TAX RATES
18
TAX INCENTIVES
20
A.
Manufacturing / Services /
Trading
B. Biotechnology
C. Education
D. Financial Services
E. Green Incentives
F. Healthcare & Wellness
G. Information and
Communication Technology
H. Other Incentives
I. Refinery & Petrochemical
Integrated Development
(RAPID)
J. Regional Operations
K. Research and Development
(R&D)
L. Logistic
M. Special Economic Corridors
N. Tourism, Hotels and
Exhibitions
O. Further / Double Deduction
20
INCOME EXEMPT FROM TAX
42
REAL PROPERTY GAINS TAX
(RPGT)
45
Scope
Withholding of RPGT
Exemptions
45
45
46
23
24
25
30
31
33
33
35
35
37
38
39
39
40
CONTENTS
SERVICE TAX
Basis of taxation
Rate of tax
Taxable person / licensing
Taxable persons and taxable
services
Payment of service tax / taxable
period
Refund of service tax on
doubtful debts or “bad debts”
47
47
47
47
47
49
50
FREE TRADE AGREEMENTS
55
EXPORT DUTIES
56
EXCISE DUTIES
Basis of taxation
Rates of duties
Excise licensing
Payment of duty
Exports
56
56
56
56
57
57
STAMP DUTY
Basis of taxation
Rates of duty
Stamping
Penalty
Relief / Exemption / Remission
from stamp duty
57
57
57
58
59
59
SALES TAX
Basis of taxation
Value of goods
Rates of tax
Taxable goods
Goods exempted
Licensing
Exemption from licensing
Tax-free raw material
Drawback
Payment of sales tax / taxable
period
Refund of sales tax on doubtful
debts or “bad debts”
50
50
50
50
50
51
51
51
52
52
52
IMPORT DUTIES
Rates of duties
Tariff rate quota
Value of goods
Exemptions
Prohibition of imports
52
52
53
53
53
53
GOODS AND SERVICES TAX
(GST)
Effective date and rate of tax
Scope of taxation
Taxable person and registration
Type of supplies
54
EMPLOYMENT GUIDELINES
Guidelines for employment of
expatriates
Employment of foreign workers
69
EMPLOYEES’ SOCIAL
SECURITY FUND
Scope of SOCSO
70
Rates of contributions
70
OTHER BUSINESS INFORMATION
ECONOMIC INDICATORS AND
DIRECTIONS
62
FINANCIAL REPORTING
65
EMPLOYEES’ PROVIDENT
FUND (EPF)
Scope of EPF
Rates of contributions
Members' accounts
Withdrawals
66
52
54
54
54
54
LICENSED MANUFACTURING
WAREHOUSE
55
FREE ZONE
55
66
66
67
67
68
68
70
CONTENTS
HUMAN RESOURCES
DEVELOPMENT FUND (HRDF)
Scope of HRDF
Rates of contribution
Financial assistance
72
72
73
73
FOREIGN AND BUMIPUTRA
EQUITY GUIDELINES
74
EXCHANGE CONTROL
Remittances abroad
Investment in foreign currency
assets by a resident
Purchase of immoveable
properties by non-residents
Borrowings in foreign currency
by a resident
Borrowings in Ringgit by a
resident
Foreign currency accounts
Non-resident’s accounts
Import and export of currency
Dealing with Israel and the
currency of Israel
Exports from Malaysia
Issuance of securities
Labuan entities
Special status companies
74
75
76
IMPORTANT FILING /
FURNISHING DATES
76
76
77
77
77
78
78
78
78
78
78
79
INCOME TAX
INCOME TAX
Scope of taxation
Income tax in Malaysia is imposed on income accruing in or derived from
Malaysia except for income of a resident company carrying on a business of
air/sea transport, banking or insurance, which is assessable on a world
income scope.
Income attributable to a Labuan business activity of the branch or subsidiary
of a Malaysian bank in Labuan is subject to tax under the Labuan Business
Activity Tax Act 1990 instead of the Income Tax Act 1967. With effect from
(w.e.f) year of assessment (YA) 2008, a Labuan entity can make an
irrevocable election to be taxed under the Income Tax Act 1967 in respect of
its Labuan business activity.
Basis of assessment
Income is assessed on a current year basis. The YA is the year coinciding
with the calendar year, for example, the YA 2015 is the year ending 31
December 2015. The basis period for a company, co-operative or trust body
is normally the financial year ending in that particular YA. For example the
basis period for the YA 2015 for a company which closes its accounts on 30
June 2015 is the financial year ending 30 June 2015. All income of persons
other than a company, co-operative or trust body, are assessed on a
calendar year basis.
Self-assessment
Under the Self-Assessment System (SAS), the responsibility for correctly
assessing a person’s tax liability is transferred from the Inland Revenue
Board (IRB) to the taxpayer.
On the submission of the income tax return, an assessment is deemed to
have been made on the taxpayer. The return is deemed to be a notice of
assessment, which is deemed to be served on the taxpayer on the day that it
is submitted. Refer to the section “Important Filing / Furnishing Dates” for
deadlines on submission of income tax return for different taxpayers.
The IRB monitors taxpayers’ compliance with the law through tax audits.
1
PERSONAL INCOME TAX
Public rulings and advance rulings
To facilitate compliance with the SAS, the Director General of Inland
Revenue (DGIR) is empowered by provisions in the Income Tax Act 1967 to
issue public rulings and advance rulings.
Public rulings are binding on the DGIR. All the public rulings can be
downloaded from the IRB’s website at www.hasil.gov.my
A taxpayer may request for an advance ruling from the DGIR. The DGIR may
make an advance ruling on how any provision of the law applies to an
arrangement described in the application. An advance ruling is only
applicable to the person making the application.
PERSONAL INCOME TAX
Tax residence status of individuals
An individual is regarded as tax resident if he meets any of the following
conditions, i.e. if he is:
 in Malaysia for at least 182 days in a calendar year;
 in Malaysia for a period of less than 182 days during the year (“shorter
period”) but that period is linked to a period of physical presence of 182 or
more “consecutive” days in the following or preceding year (“longer
period”). Temporary absences from Malaysia for certain specified reasons
during the shorter or longer period are counted as part of the consecutive
days, provided that the individual is in Malaysia before and after each
temporary absence;
 in Malaysia for 90 days or more during the year and, in any 3 of the 4
immediately preceding years, he was in Malaysia for at least 90 days or
was resident in Malaysia; or
 resident for the year immediately following that year and for each of the 3
immediately preceding years.
2
PERSONAL INCOME TAX
Rates of tax
Resident individuals
On the first
On the next
Chargeable
Income
RM
5,000
15,000
On the first
On the next
On the first
On the next
On the first
On the next
On the first
On the next
On the first
On the next
On the first
On the next
On the first
Above
20,000
15,000
35,000
15,000
50,000
20,000
70,000
30,000
100,000
150,000
250,000
150,000
400,000
400,000
Rate
%
2
YA 2014
Tax
Payable
RM
0
300
300
900
1,200
1,650
2,850
3,800
6,650
7,200
13,850
39,000
52,850
39,000
91,850
6
11
19
24
26
26
Rate
%
1
5
10
16
21
24
24.5
YA 2015*
Tax
Payable
RM
0
150
150
750
900
1,500
2,400
3,200
5,600
6,300
11,900
36,000
47,900
36,750
84,650
25
26
* W.e.f YA 2015, two new chargeable bands will be introduced and tax rates will be reduced by
1% to 3%.
 A qualified person (defined) who is a knowledge worker residing in
Iskandar Malaysia is taxed at the rate of 15% on income from an
employment with a designated company engaged in a qualified activity in
that specified region. The employment must have commenced on or after
24 October 2009 but not later than 31 December 2015.
 An approved individual under the Returning Expert Programme who is a
resident is taxed at the rate of 15% on income in respect of having or
exercising employment with a person in Malaysia for 5 consecutive years
of assessment (YAs).
Non-resident individuals
Types of income
Public Entertainer’s professional income
Interest
Royalty
3
YA 2015
Rate (%)
15
15
10
PERSONAL INCOME TAX
Types of income
YA 2015
Rate (%)
Special classes of income:
 rental of moveable property
 technical or management services fees*
 payment for services rendered in connection with use of
property or installation or operation of any plant, machinery or
other apparatus purchased from a non-resident person
Dividends (single tier)
Business and employment income
Income other than the above
10
Exempt
26**
10
* Only fees for technical or management services rendered in Malaysia are liable to tax.
** Reduced to 25% w.e.f YA 2015.
Personal reliefs for resident individuals
Types of relief
Self
Disabled individual - additional relief for self
Spouse
Disabled spouse - additional spouse relief
Child
 per child (below 18 years old)
 per child (over 18 years old) receiving full-time instruction of
higher education in respect of:
- diploma level and above in Malaysia; or
- degree level and above outside Malaysia
 per child (over 18 years old) serving under article of indentures
in a trade or profession
 per physically / mentally disabled child
 physically / mentally disabled child (over 18 years of age)
receiving full-time instruction at institution of higher education or
serving under articles or indentures in a trade or profession
Life insurance premiums and EPF contributions
Private Retirement Scheme contributions and Deferred annuity
scheme premium (YA 2012 to YA 2021)
Insurance premiums for education or medical benefits
Expenses on medical treatment, special needs or carer
expenses for parents (evidenced by medical certification)
4
YA 2015
RM
9,000
6,000
3,000
3,500
1,000
6,000
6,000
6,000
12,000
6,000*
3,000*
3,000*
5,000*
PERSONAL INCOME TAX
Types of relief
Medical expenses for self, spouse or child suffering from a
serious disease (including fees of up to RM500 incurred by self,
spouse or child for complete medical examination)
Purchase of sports equipment
Fee expended for any course of study up to tertiary level other
than a degree at Masters or Doctorate level, undertaken for the
purpose of acquiring law, accounting, Islamic financing,
technical, vocational, industrial, scientific or technological skills
or qualifications or any course of study for a degree at Masters
or Doctorate level undertaken for the purpose of acquiring any
skill or qualification
Purchase of supporting equipment for self (if a disabled person)
or for disabled spouse, child or parent
Cost incurred for the purchase of books, journals, magazines
and other similar publications for the purpose of enhancing
knowledge
Relief for purchase of personal computer (once every 3 years)
Deposit for child into the Skim Simpanan Pendidikan Nasional
account established under Perbadanan Tabung Pendidikan
Tinggi Nasional Act 1997 (until YA 2017)
Relief on housing loan interest for the purchase of one unit
residential property where the Sale and Purchase Agreement is
executed between 10 March 2009 and 31 December 2010 (given
for 3 consecutive years)
YA 2015
RM
6,000*
300*
5,000*
6,000*
1,000*
3,000*
6,000*
10,000*
* Maximum relief
Tax rebates for resident individuals
Individual’s chargeable income does not exceed RM35,000
If husband and wife are separately assessed and each
chargeable income does not exceed RM35,000
If husband and wife are jointly assessed and the joint
chargeable income does not exceed RM35,000
Rebate for Zakat, Fitrah or other Islamic religious dues paid
Rebate (RM)
400
400
(each)
800
Actual amount
expended
The above rebate granted is deducted from tax charged and any excess is
not refundable.
5
EMPLOYMENT INCOME
EMPLOYMENT INCOME
Derivation
Employment income is regarded as derived from Malaysia and subject to
Malaysian tax where the employee:
 exercises an employment in Malaysia;
 is on paid leave which is attributable to the exercise of an employment in
Malaysia;
 performs duties outside Malaysia which are incidental to the exercise of an
employment in Malaysia;
 is a director of a company resident in Malaysia; or
 is employed to work on board an aircraft or ship operated by a person who
is resident in Malaysia.
Exemption (short-term employees)
Income of a non-resident from an employment in Malaysia is exempt:
 if the aggregate of the period or periods of employment in Malaysia does
not exceed 60 days in a calendar year; or
 where the total period of employment which overlaps 2 calendar years
does not exceed 60 days.
Employees of regional operations
Non-Malaysian citizens who are based in Malaysia working in Operational
Headquarter (OHQ) or Regional Office (RO), or International Procurement
Centre (IPC), or Regional Distribution Centre (RDC) or Treasury
Management Centre (TMC) status companies would be taxable on
employment income attributable to the number of days they exercise
employment in Malaysia.
Types of employment income and valuation
Type of employment income
(a) Cash remuneration, e.g. salary,
bonus, allowances/perquisites
Taxable Value to employee
Total amount paid by employer.
Certain allowances/perquisites are
exempted from tax. Please refer to
“Perquisites” below.
Based on formula or prescribed value
method.
Certain benefits are exempted from
tax. Please refer to “Benefits-in-kind”
below.
(b) Benefits-in-kind, e.g. motorcar
and petrol, driver, gardener, etc
6
EMPLOYMENT INCOME
Type of employment income
(c) Housing Accommodation
(unfurnished)
- employee or service director
Taxable Value to employee
Lower of 30% of cash remuneration *
or defined value of accommodation
Defined value of accommodation
- directors of controlled companies
Hotel accommodation for
employee or service director
(d) Withdrawal from unapproved
pension fund
(e) Compensation for loss of
employment
3% of cash remuneration *
Employer’s contribution
Total amount paid by employer.
Exemption is available under
specified conditions.
* Cash remuneration does not include equity-based income.
Perquisites
The IRB issued Public Ruling 2/2013 for the valuation of perquisites given to
employees. Below are some examples of perquisites:
Perquisites to employee
Taxable Value to employee
Petrol card/petrol or travel
allowances and toll rates
Total amount paid by employer.
Exemption available up to RM6,000 per
annum if the allowances/perquisites are for
official duties**
Total amount paid by employer. Exemption
available up to RM2,400 per annum**
Fully exempted**
Fully exempted**
Loans totalling RM300,000 for
housing/passenger motor vehicles and
education**
Total amount paid by employer
Total amount paid by employer. Exemption
available up to RM2,000 per annum for the
following types of award:**
 long service (more than 10 years of
employment with the same employer)
 past achievement
 service excellence, innovation, or
productivity award
Childcare subsidies
/allowances
Parking fees/allowances
Meal allowances
Interest on loan subsidies
Income tax borne by employer
Award
** Exemptions are not extended to directors of controlled companies, sole proprietors and
partnerships.
7
EMPLOYMENT INCOME
Benefits-in-kind (BIK)
The IRB has issued Public Ruling 3/2013 for the valuation of benefits-in-kind
provided to employees.
The value of BIK provided for an employee may be determined by either of
the following methods:
 formula method, or
 prescribed value method
Under the formula method, annual value of BIK provided to an employee is
computed using the following formula:
Cost of the asset provided as a benefit/amenity
Prescribed life span of the asset
= Annual value
 The prescribed life span for various benefits are as follows:
Items
Prescribed average life span
Years
8
Motorcar
Furnishings:
 Air-conditioner
 Curtains & carpets
 Furniture
 Refrigerator
 Sewing machine
Kitchen utensils/equipment
Entertainment and recreation:
 Organ
 Piano
 Stereo set, TV, video recorder, CD/DVD player
 Swimming pool (detachable), sauna
 Miscellaneous
8
8
5
15
10
15
6
10
20
7
15
5
EMPLOYMENT INCOME
 Under the prescribed value method the following are some values of BIK
prescribed in the Ruling:
Value per year
Household furnishings, apparatus & appliances
a) Semi-furnished with furniture in the lounge,
dining room and bedroom
b) Semi-furnished as above and with airconditioners or carpets or curtains
c) Fully furnished
d) Service charges and other bills (e.g. water,
electricity)
Prescribed value of other benefits
- Driver
- Domestic servants
- Gardeners
- Corporate recreational club membership
RM840
RM1,680
RM3,360
Charges and bills paid
by employer
RM7,200 per driver
RM4,800 per servant
RM3,600 per gardener
Membership
subscription paid by
Employer
 The following are some exemptions for certain BIK:**
Exemption
 Leave passages
 Employers’ goods provided free or at a
discount
 Employers’ own services provided full or at a
discount
 Maternity expenses & traditional medicines
 Telephone (including mobile telephone),
telephone bills, pager, personal data
assistant (PDA) and broadband subscription
(i) one overseas leave
passage up to a
maximum of RM3,000
for fares only; or
(ii) 3 local leave passages
including fares, meals
and accommodation
Exemption is available up
to RM1,000 per annum.
Any benefit exceeding
RM1,000 will be subject
to tax
Fully exempted
Fully exempted
Fully exempted, limited to
one unit for each asset
** Exemptions are not extended to directors of controlled companies, sole proprietors and
partnerships.
9
CORPORATE INCOME TAX
Standard rates for motorcar and fuel provided:
Cost of car
(when new)
RM
Up to 50,000
50,001 – 75,000
75,001 – 100,000
100,001 – 150,000
150,001 – 200,000
200,001 – 250,000
250,001 – 350,000
350,001 – 500,000
500,001 and above
Annual prescribed
benefit of motorcar
RM
1,200
2,400
3,600
5,000
7,000
9,000
15,000
21,250
25,000
Annual prescribed
benefit of fuel**
RM
600
900
1,200
1,500
1,800
2,100
2,400
2,700
3,000
** Employee is given a choice to determine fuel benefit based on annual prescribed rates or
exemption available for petrol usage.
Collection of tax
 Taxes are collected from employees through compulsory monthly
deductions from remuneration under the Monthly Tax Deduction (MTD)
system.
 Individuals receiving non-employment income are required to pay by
compulsory bi-monthly instalments.
CORPORATE INCOME TAX
Residence status
A company is tax resident in Malaysia if its management and control is
exercised in Malaysia. Management and control is normally considered to be
exercised at the place where directors’ meetings are held concerning
management and control of the company.
Income tax rates
Resident companies are taxed at the rate of 25% (reduced to 24% w.e.f YA
2016) while those with paid-up capital of RM2.5 million or less* are taxed at
the following scale rates:
10
CORPORATE INCOME TAX
YA 2014 & 2015
20%
25%
Chargeable Income
The first RM500,000
In excess of RM500,000
YA 2016
19%
24%
* The companies must not be part of a group of companies where any of their related
companies have a paid-up capital of more than RM2.5 million.
Non-resident companies are taxed at the following rates:
Type of income
Business income
Royalties
Rental of moveable properties
Technical or management service fees
Interest
Dividends
Other income
YA 2015
25% #
10%
10%
10%**
15%***
Exempt****
10%
*
Where the recipient is resident in a country which has a double tax treaty with Malaysia, the
tax rates for specific sources of income may be reduced.
Only services rendered in Malaysia are liable to tax.
Interest paid to a non-resident by a bank or a finance company in Malaysia or on approved
loans is exempt from tax. An approved loan is a loan granted to or guaranteed by the
Malaysian government.
**** For all dividends paid, credited or distributed from 1 January 2014 onwards.
#
Reduced to 24% w.e.f YA 2016.
**
***
Collection of tax
An estimate of a company’s tax payable for a YA must be furnished by all
companies to the Director General not later than 30 days before the
beginning of the basis period except for the following:
 A newly established company with paid-up capital of RM2.5 million and
less is exempted from this requirement for 2 to 3 YAs, beginning from the
YA in which the company commences operation subject to certain
conditions.
 A company commencing operations in a YA is not required to furnish
estimates of tax payable or make instalment payments if the basis period
for the YA in which the company commences operations is less than 6
months.
Tax is generally payable by 12 equal monthly instalments beginning from the
second month of the company’s basis period (financial year).
The balance of tax payable by a company based on return submitted is due
to be paid by the due date for submission of the return.
In general, tax on all income other than income from a business or
11
CORPORATE INCOME TAX
employment source are collected by means of withholding tax. The
withholding tax is payable within one month of crediting or paying the nonresident company.
Profit distribution
Tax on a company’s profits is a final tax and dividends paid, credited or
distributed from 1 January 2014 are exempt in the hands of shareholders.
Losses
Business losses can be set off against income from all sources in the current
year. Any unutilised losses can be carried forward indefinitely to be utilised
against income from any business source. For dormant companies, the carry
forward of losses is only allowed if the shareholder continuity test is met, i.e.
shareholders of the company at the beginning of the basis period for that YA
are substantially the same as those at the end of the basis period for the
(prior) YA in which the loss was initially ascertained.
Group relief
Under the group relief provision, a company may surrender a maximum of
70% of its adjusted loss for a YA to one or more related companies. The
claimant and surrendering companies must meet the following conditions:
 Resident and incorporated in Malaysia.
 Paid-up capital of ordinary shares exceeding RM2.5 million at the
beginning of the basis period.
 The same (12-month) accounting period.
 Both companies are “related companies” as defined in the law, and must
be “related” throughout the relevant basis period as well as the 12 months
preceding that basis period.
Companies currently enjoying certain incentives such as pioneer status (PS),
ITA, reinvestment allowance, etc. are not eligible for group relief.
Tax deductions
 Generally, tax deduction is allowed for all outgoings and expenses wholly
and exclusively incurred in the production of income.
 Certain expenses are specifically disallowed, for example:
- Domestic, private or capital expenditure
- Lease rentals for passenger cars exceeding RM50,000 or RM100,000
per car, the latter amount being applicable to vehicles costing
RM150,000 or less which have not been used prior to the rental
12
CAPITAL ALLOWANCES
-
Employer’s contributions to unapproved pension, provident or saving
schemes
Employer’s contributions to approved schemes in excess of 19% of
employee’s remuneration
Non-approved donations
50% of entertainment expenses with certain exceptions
Employee’s leave passages
Interest, royalty, contract payment, technical fee, rental of movable
property or other payments made to non-residents which are subject to
Malaysian withholding tax but where the withholding tax was not paid
Transfer pricing
 The DGIR is empowered to make adjustments on transactions of goods
and services if he is of the opinion that the transactions were not entered
into on arm’s-length basis.
 Guidelines and the following rules have been issued by the DGIR:
- Income Tax (Transfer Pricing) Rules 2012 (w.e.f 1 January 2009)
- Income Tax (Advance Pricing Arrangement) Rules 2012 (w.e.f 1
January 2009)
Thin capitalisation
A new provision for thin capitalisation was introduced w.e.f 1 January 2009
under which the portion of interest charge that relates to the amount of
financial assistance that is excessive is disallowed as a deduction. However,
the implementation of specific rules relating to this provision has been
deferred to December 2015.
Loan / advances to director
Companies are deemed to derive interest income from loan or advances
(sourced from internal funds of the company) provided to a director of the
company for that basis period based on prescribed formula.
CAPITAL ALLOWANCES
Industrial buildings
 Qualifying expenditure (QE)
QE for purposes of industrial building allowance is the cost of construction
of buildings or structures which are used as industrial buildings. In the
case of a purchased building, the QE is the purchase price.
13
CAPITAL ALLOWANCES
 Industrial buildings
An industrial building includes a building used as/for:
- a factory, warehouse
- a dock, wharf, jetty
- working a farm, mine
- supplying water or electricity, or telecommunication facilities
- approved research and approved training
- a private hospital, maternity home and nursing home which is licensed
under the law
- an old folks’ care centre approved by the Social Welfare Department
- for a school or an educational institution approved by the Minister of
Education
- technical or vocational training approved by the Minister of Finance
- a hotel registered with the Ministry of Tourism
 The Minister of Finance may prescribe a building used for the purpose of a
person’s business as an industrial building.
 General rates of allowance for Industrial building, whether constructed or
purchased (w.e.f YA 2002):
-
Initial allowance
:
Annual allowance :
10%
3%
Plant and machinery
 Qualifying expenditure (QE)
QE includes:
- cost of assets used in a business, such as plant and machinery, office
equipment, furniture and fittings, motor vehicles, etc.
- the cost of construction and installation of plant and machinery (subject
to payment of withholding tax where the installation is carried out by a
non-resident).
-
expenditure on fish ponds, animal pens, cages and other structures
used for agricultural or pastoral pursuits.
 General rates of capital allowance
YA 2015
Initial allowance
Annual allowance
20%
20%
20%
14%
20%
10%
Heavy machinery
General plant and machinery
Furniture and fixtures
14
CAPITAL ALLOWANCES
YA 2015
Initial allowance
Annual allowance
20%
10%
20%
20%*
Office equipment
Motor vehicles
* QE for non-commercial vehicle is restricted to the maximum amount below:


New vehicles purchased on or after 28 October 2000 where
on-the-road price is RM150,000 or less
Vehicles other than the above
Maximum QE
RM100,000
RM50,000
 Expenditure on assets with life spans of not more than 2 years is allowed
on a replacement basis.
Accelerated capital allowances
Example of assets which qualify for accelerated capital allowance rates:
Initial
Allowance
%
Industrial buildings
Public roads and ancillary structures which
expenditure is recoverable through toll collection
Buildings for the provision of child care facilities
/ centre
Buildings used as living accommodation for
employees by a person engaged in a
manufacturing, hotel or tourism business or
approved service project
Buildings used as a school or an educational
institution approved by the Minister of Education
or any relevant authority or for the purposes of
industrial, technical or vocational training
approved by the Minister
Building used as a warehouse for storage of
goods for export or for storage of imported
goods to be processed and distributed or reexported
Buildings purchased or constructed by a
BioNexus status company for use in its
approved business or expansion project
15
Annual
Allowance
%
10
6
-
10
-
10
-
10
-
10
-
10
CAPITAL ALLOWANCES
Buildings constructed under an agreement with
the government on a build-lease-transfer basis,
approved by the Minister of Finance
Buildings constructed for the Government or
statutory body under Private Financing
Initiatives approved by the Prime Minister’s
Department under build-lease-maintain-transfer
basis where no consideration has been paid by
the Government or statutory body
Plant and machinery (P & M)
Computer and information technology assets
and computer software (until YA 2016)
Security control and monitoring equipment (until
YA 2015)
Environmental protection equipment
P & M for building and construction
P & M of a manufacturing company used
exclusively for recycling wastes or further
processing of wastes into a finished product
P & M of agriculture/plantation companies
P & M for maintaining the quality of power
supply
Moulds used in the production of industrialised
building system component
Initial
Allowance
%
10
Annual
Allowance
%
6
10
6
20
80
20
80
40
30
40
20
10, 14 or 20
20
20
20
40
40
40
20
Small-value assets not exceeding RM1,000 (RM 1,300 w.e.f YA 2015) each
are eligible for 100% capital allowances. The total capital allowances of such
assets are capped at RM10,000 (RM13,000 w.e.f YA 2015) except for SMEs
(as defined).
Additional capital allowances to increase automation the
manufacturing sector
Total Capital
Allowance (%)
First category
High labour intensive industries (e.g. rubber products, plastics,
wood, furniture and textiles) - first RM4 million incurred within
2015 to 2017
Second category
Other industries - first RM2 million incurred within 2015 to 2020
16
200
200
AGRICULTURE ALLOWANCES
Disposals
Balancing adjustments (allowance/charge) will arise on the disposal of assets
on which capital allowances have been claimed. Generally, the balancing
adjustment is the difference between the tax written down value and the
disposal proceeds, except that balancing charge is restricted to the amount of
allowances previously claimed.
Controlled transfers
No balancing adjustments will be made where assets are transferred
between persons/companies under common control. In such cases, the
actual consideration for the transfer of the asset is disregarded and the
disposer/acquirer is deemed to have disposed of/acquired the asset at the tax
written down value.
Disposals within 2 years
Capital allowances which have been previously granted shall be clawed back
if the asset is sold within 2 years from the date of purchase, except by reason
of death of the owner or other reasons the DGIR thinks appropriate.
Unabsorbed capital allowances
Capital allowances are granted in respect of a business source only and any
unabsorbed allowances can be carried forward indefinitely to be utilised
against income from the same business source.
The carry forward and utilisation of unabsorbed capital allowances brought
forward from a prior year for dormant companies are subject to the
shareholder continuity test, similar to unutilised business losses.
AGRICULTURE ALLOWANCES
Qualifying agriculture expenditure
Clearing and preparation of land
Planting (but not replanting) of crops on cleared land
Construction of a road or bridge on a farm
Building used as living accommodation or for welfare of a person
employed in working a farm
Any other building
17
Rates
%
50
50
50
20
10
DOUBLE TAX TREATIES AND WITHHOLDING TAX RATES
DOUBLE TAX TREATIES AND WITHHOLDING TAX RATES
The following countries have concluded double tax treaties with Malaysia:
Treaty countries
Albania
Australia
Austria
Bahrain
Bangladesh
Belgium
Bosnia & Herzegovina 1
Brunei
Canada
China, People’s Republic
Chile
Croatia
Czech Republic
Denmark
Egypt
Fiji
Finland
France
Germany
Hong Kong
Hungary
India
Indonesia
Iran
Ireland
Italy
Japan
Jordan
Kazakhstan
Korea Republic
Kyrgyz Republic
Kuwait
Laos
Lebanese Republic
Luxembourg
Malta
Interest
10 or Nil
15 or Nil
15 or Nil
5 or Nil
15 or Nil
10 or Nil
10 or Nil
10 or Nil
15 or Nil
10 or Nil
15
10 or Nil
12 or Nil
15 or Nil
15 or Nil
15 or Nil
15 or Nil
15 or Nil
10 or Nil
10 or Nil
15 or Nil
10 or Nil
10 or Nil
15 or Nil
10 or Nil
15 or Nil
10 or Nil
15 or Nil
10 or Nil
15 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
15 or Nil
18
Rate of withholding tax %
Royalties
Technical Fees
10
10
10 or Nil
Nil
10
10
8
10
10 or Nil
10
10
10
8
10
10
10
10 or Nil
10
10
10
10
5
10
10
10
10
10 or Nil
10
10
10
10
10
10 or Nil
10
10 or Nil
10
7
7
8
5
10
10
10
10
10
10
10
10
8
10
10 or Nil
10
10
10
10
10
10
10
10 or Nil
10
10
10
10
10
10
10
8
10
8
8
10
10
DOUBLE TAX TREATIES AND WITHHOLDING TAX RATES
Treaty countries
Mauritius
Morocco
Mongolia
Myanmar
Namibia
Netherlands
New Zealand
Norway
Pakistan
Papua New Guinea
Philippines
Poland (New)1
Qatar
Romania
Russian Federation
San Marino
Saudi Arabia
Senegal1
Seychelles Republic
Singapore
Sri Lanka
South Africa
Spain
Sudan
Sweden
Switzerland
Syria
Thailand
Turkey
Turkmenistan
United Arab Emirates
United Kingdom
Uzbekistan
Venezuela
Vietnam
Zimbabwe
Interest
15 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
15 or Nil
15 or Nil
15 or Nil
15 or Nil
15 or Nil
10 or Nil
5 or Nil
15 or Nil
15 or Nil
10 or Nil
5 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
10 or Nil
15 or Nil
15 or Nil
10 or Nil
5 or Nil
10 or Nil
10 or Nil
15 or Nil
10 or Nil
10 or Nil
Rate of withholding tax %
Royalties
Technical Fees
10
10
10
10
10
10
10
10
5
5
8 or Nil
8
10 or Nil
10
10 or Nil
10
10 or Nil
10
10
10
10 or Nil
10
8
8
8
8
10 or Nil
10
10
10
10
10
8
8
10
10
10
10
8
5
10
10
5
5
7
5
10
10
8
8
10 or Nil
10
10
10
10 or Nil
10
10
10
10
Nil
10
10
8
8
10
10
10
10
10
10
10
10
Notes
* Argentina and the United State of Amerika – Restricted double tax treaty covering air and sea
transport operations in international traffic.
* There is no withholding tax on dividends paid by Malaysian companies.
1
Pending ratification
19
TAX INCENTIVES
TAX INCENTIVES
Malaysia offers a wide range of tax incentives ranging from tax exemptions,
allowances based on capital expenditure to enhanced tax deductions. Where
income is exempted, tax exempt dividends may be paid out of the exempted
income. For incentives by way of allowances, any unutilised allowances can
generally be carried forward until fully utilised. These tax incentives are
generally available for tax resident companies.
A. MANUFACTURING / SERVICES / TRADING SECTOR
Pioneer status (PS) and Investment tax allowance (ITA)
Companies intending to engage or which have commenced production less
than a year in a promoted activity or promoted product in the manufacturing,
food processing, agricultural, hotel, tourism or other industrial or commercial
sectors may be eligible for PS or ITA.
 PS – tax exemption on 70% of statutory income for 5 years from
production day.
 ITA – 60% of qualifying capital expenditure (QCE) incurred within 5 years
of approval date to be offset against 70% of statutory income for each YA
until fully utilised.
 A company with PS / ITA status which intends to undertake reinvestment
before expiry of its PS / ITA status may opt for reinvestment allowance,
provided it surrenders its PS / ITA status.
Enhanced PS / ITA
Pioneer status
Qualifying industry
Incentive
Investment tax allowance
TRP1
Incentive
(years)
TRP1
(years)
High technology companies
100% of
engaged in new and emerging SI2
technologies
5 60% QCE3 against
100% SI
5
Companies participating in
automotive component
modules
100% of
SI
5 60% QCE against
100% SI
5
Companies producing
specialised machinery and
equipment
100% of
SI
Companies providing
technical and vocational
-
20
5 + 5 100% QCE against
100% SI
5
- 100% QCE against
70% SI
10
TAX INCENTIVES
Pioneer status
Qualifying industry
Incentive
Investment tax allowance
TRP1
Incentive
(years)
TRP1
(years)
training, and private higher
education institution providing
qualifying science courses
Projects of national and
strategic importance
100% of
SI
5 + 5 100% QCE against
100% SI
5
Companies using oil palm
biomass to produce value
added products
100% of
SI
5 + 5 100% QCE against
100% SI
5
Companies reinvesting in
post-pioneer period in
production of
 heavy machinery,
specialised machinery, and
equipment
 cold chain facilities and
services for perishable
agriculture produce
70% of SI
5 60% QCE against
70% SI
5
Companies with halal / other
quality certification producing
halal food
-
- 100% QCE against
100% SI
5
Providers of industrial design
services (until 31 Dec 2016)
70% of SI
5 -
-
Notes
*The above list is not exhaustive. Refer to the other relevant industries in this guide for further details
1
2
3
Tax relief period (in terms of years).
Statutory income
Qualifying capital expenditure
Special incentive scheme
A company incorporated and resident in Malaysia, deriving income from an
“approved business” which is approved by the Minister of Finance.
Incentive:
 Income tax exemption of 70% of statutory income (or any other rate
prescribed by the Minister) of the approved business; or
 Income tax exemption on statutory income of the approved business by
way of an allowance (rate of allowance to be determined by the Minister)
21
TAX INCENTIVES
Allowance for increased export
A resident company engaged in manufacturing or agriculture, which has
exported manufactured products or agricultural produce, or services.
Incentive:
Allowance at the following rates, deductible up to 70% of statutory income:
Manufactured products
Agricultural produce
% of value
added*
Allowance (% of
increased exports)
30
10
50
15
-
10
Designated “Qualifying Services”
50
*Value added means ex-factory price less total cost of raw materials.
Local companies engaged in manufacturing or agricultural activities qualify
for enhanced allowance rates of:
 30% of increased export value where significant increase (at least 50%) in
exports is achieved;
 50% of increased export value if new markets are penetrated; or
 100% of increased export value if the company is awarded the “Export
Excellence Award” by the Ministry of International Trade and Industry. For
services, this incentive rate is extended to recipients of “Export Excellence
Award (Services)” and “Brand Excellence Award”.
Approved services project (ASP)
Resident companies in the communication, utilities and transportation
services subsectors which have incurred QCE on ASP that is, a project in any
of the above services subsectors, which has been approved by the Minister
of Finance.
Incentive:
 Investment allowance of 60% of QCE incurred within 5 years to be offset
against 70% of statutory income, or
 Section 127 exemption from tax of 70% of statutory income for 5 years.
 Industrial building allowance for buildings constructed or purchased for
ASP purposes.
 Exemption from customs duty and sales tax on imported material and
machinery which is not available locally, or, if locally purchased, such
items must be used as direct inputs in ASP.
22
TAX INCENTIVES
Enhanced relief is available for projects of national and strategic importance:
- Investment allowance of 100% of QCE to be offset against 100% of
statutory income, or
- Section 127 exemption of 100% of statutory income for 10 years.
Food production
Company that invests in its subsidiary company which is engaged in
approved food production activities is eligible for tax deduction equivalent to
the amount of investment made in that subsidiary.
Subsidiary company engaged in approved food production activities is eligible
for 100% tax exemption on statutory income for 10 years for new project or 5
years for expansion project (Applications by 31 December 2015 to the
Ministry of Agriculture and Agro-based Industry).
Reinvestment allowance
A Malaysian resident company which has been in operation for not less than
36 months and has incurred QCE on a factory, plant and machinery used in
Malaysia to expand, modernise, automate, or diversify existing manufacturing
business or approved agriculture project.
Incentive:
 Allowance of 60% of QCE to be offset against 70% of statutory income for
15 years beginning from the YA the reinvestment allowance is first
claimed.
 Allowance of 60% of QCE to be offset against 100% of statutory income
where the qualifying project has achieved the level of productivity as
prescribed by the Minister of Finance.
B. BIOTECHNOLOGY
Company undertaking biotechnology activity with approved BioNexus status
from Malaysian Biotechnology Corporation Sdn Bhd.
Incentive:
 100% exemption for 10 years (new business) or 5 years (expansion
project) from the first year in which the company derives statutory income;
or ITA of 100% on QCE incurred within a period of 5 years to be offset
against 100% of statutory income.
 Concessionary tax rate of 20% on statutory income derived from an
approved business for 10 years upon expiry of tax exempt period.
 Industrial building allowance of 10% over 10 years on buildings used
solely for approved business or expansion project of a BioNexus company.
23
TAX INCENTIVES
 Stamp duty and real property gains tax exemptions given to a BioNexus
company undertaking approved merger and acquisition scheme with a
biotechnology company.
 Import duty and sales tax exemption on raw materials/components and
machinery/equipment.
Company or individual investing in a BioNexus company is eligible for tax
deduction equivalent to the total investment in seed capital and early stage
financing.
Bioeconomy Community Development Programme
Company undertaking Research and Development (R&D) activity for the
development of Bioeconomy and applications for incentives received by
Malaysian Biotechnology Corporation Sdn Bhd from 1 January 2014 to 31
December 2018.
Incentive:
 Tax deduction for acquisition of technology platform in bio-based industry.
 Import duty exemption on R&D equipment for companies that invest in
pilot plants (for pre-commercialisation purposes).
 Special incentive for operational cost incurred on human capital
development for Centre of Excellence for R&D.
C. EDUCATION
Private higher education institutions (PHEIs)
PHEIs incurring expenses on development of new courses which comply with
regulatory requirements relating to those courses.
Incentive:
Deduction on the expenses to be claimed over a period of 3 years.
Non-profit oriented school
Non-profit oriented school approved and recognized by the Ministry of
Education (MOE).
Incentive:
Tax exemption on income from management of the school.
Profit Oriented Private or International School
Profit oriented private school or international school registered with MOE.
Incentive:
24
TAX INCENTIVES
 70% income tax exemption for a period of 5 years or ITA of 100% on QCE
incurred within 5 years which can be used to offset 70% of statutory income
(application received by 31 December 2015).
 Import duty and sales tax exemption for educational equipment
(applications from 8 October 2011).
 Double deduction for overseas promotional expenses (from YA 2012).
Pre-School Education / Kindergarten
Private pre-school / kindergarten registered with MOE.
Incentive:
 Tax exemption on statutory income from the business of the pre-school /
kindergarten for a period of 5 years (from YA 2013).
 IBA at annual rate of 10% for building used as pre-school / kindergarten.
D. FINANCIAL SERVICES
Closed-end fund company
Malaysian incorporated public limited company engaged wholly in investment
of funds in securities and approved by the Securities Commission (SC).
Incentive:
 Tax exemption on gains from realisation of investments and certain interest
income.
 Deduction of up to 25% of “permitted expenses”.
Foreign fund management company
Malaysian incorporated company licensed to provide fund management
services.
Incentive:
10% tax on chargeable income from the provision of management services to
foreign investors.
Underwriting, distributing or dealing in sukuk
Holder of relevant licence and registered person under the Capital Markets
and Services Act 2007 (CMSA) carrying out activities of arranging,
underwriting and distributing of or dealing in non-Ringgit sukuk originating
from Malaysia.
Incentive:
Tax exemption on statutory income from such activities. (YA 2009 to YA
2014)
25
TAX INCENTIVES
Issuance of agro-sukuk, retail sukuk and retail debentures
Company that issues Agro-sukuk, retail sukuk and retail debentures
approved by the SC or the Labuan Financial Services Authority (Labuan
FSA).
Incentive:
 Double deduction on the expenses for the issuance of approved AgroSukuk (YA 2013 to YA 2015) and also on additional expenses for issuance
of approved retailed debentures (YA 2012 to YA 2015).
 Single deduction on additional expenses for the issuance of retail sukuk
(YA 2012 to YA 2015).
 Stamp duty exemption on instruments relating to the sale and purchase of
retail debentures and retail sukuk as approved by the SC under the CMSA
executed by individual investors (for instruments executed from 1 October
2012 to 31 December 2015).
Islamic banking and takaful business
Licensed Islamic banks or banking units and takaful operators or units
conducting business in international currencies.
Incentive:
 Tax exemption on statutory income from business conducted in
international currencies (YA 2007 to YA 2016).
 Stamp duty exemption on certain instruments relating to Islamic banking,
takaful activities and Islamic capital market under a scheme to promote
Malaysia International Islamic Financial Centre executed from 1 January
2007 to 31 December 2016.
Islamic fund management
Fund management company providing fund management services on funds
established under the Syariah principles and approved by the SC.
Incentive:
Tax exemption on statutory income from the above fund management
services (YA 2008 to YA 2016).
Islamic securities
Company that incurs expenditure in the issuance of Islamic securities based
on certain Syariah principles and approved by the SC or the Labuan FSA.
Incentive:
Deduction on the above issuance expenditure (YA 2011 to YA 2015 – where
approved by SC or Labuan FSA; YA 2012 to YA 2015 – where issued under
26
TAX INCENTIVES
Wakalah principle; YA 2016 to YA 2018 – where issued under Ijarah and
Wakalah principles).
Islamic stock broking company
Newly established Islamic stock broking company that applies to Bursa
Malaysia from 2 September 2006 to 31 December 2015 and commences its
business within 2 years from the date of approval.
Incentive:
Deduction on the establishment expenditure.
Listing of foreign companies and foreign products in Bursa
Malaysia
Licensed and registered person which provides advisory services in
structuring and listing of a foreign corporation or the listing of a foreign
investment product on an approved stock exchange.
Incentive:
Tax exemption on statutory income from the above advisory services (YA
2009 to YA 2013).
Real Estate Investment Trust (REIT) / Property Trust Fund
(PTF)
REIT/PTF approved by the SC.
Incentive:
 Tax exemption on all income if at least 90% of total income is distributed.
 Stamp duty exemption on instruments of transfer/deed of assignment
relating to the purchase of real property and instruments of transfer of real
property to REIT/PTF.
 Real property gains tax exemption on disposal of real property to REIT.
 Final withholding tax of 10% on dividends paid by REIT to non-corporate or
foreign institutional investors (1 January 2009 till 31 December 2016).
 Special single deduction for consultancy, legal and valuation service fees
incurred in the establishment of REIT.
 No balancing charge on disposal of industrial building from a company to a
REIT. The REIT is eligible to claim the balance of unclaimed industrial
building allowance of the disposer if the disposer company owns 50% or
more of the units in the REIT.
Special purpose vehicle (SPV) for Islamic financing
SPV established solely for the purpose of complying with Syariah principles in
27
TAX INCENTIVES
the issuance of Islamic securities.
Incentive:
 The SPV is not subject to income tax and not required to comply with
administrative procedures under the Income Tax Act 1967.
 Company that established the SPV is allowed a deduction for cost of
issuance of Islamic securities. The company is deemed to be the recipient
of the SPV’s income and taxed accordingly.
Venture capital industry
1. Venture capital company (VCC)
VCC that invests in early stage financing of a venture company (VC) which
is not the VCC’s related company at the point of first investment.
Incentive:
(i) Tax exemption on income from all sources, other than interest income
from savings or fixed deposits and profits from Syariah-based deposits
for the following duration:
Exempt
Period
10 years
Conditions
- at least 70% of invested funds is invested in VC; or
- at least 50% of invested funds is invested in VC in the form of
seed capital
(ii) Deduction of the value of investment made in a VC against business
income.
2. Individual investor
Individual who invests in the early stage financing of a VC.
Incentive:
Deduction of the value of investment made in a VC against business
income.
3. Angel investor
Resident individual who invests not more than 30% of the shares in an
Investee Company
Incentive:
Exemption of aggregate income in the second YA following the investment
for a sum equal to the amount invested in the Investee Company
(applications received by Ministry of Finance (MoF) from 1 January 2013
to 31 December 2017).
28
TAX INCENTIVES
 Angel investor is unrelated to Investee Company
 At least 51% of ordinary shares of Investee Company is directly owned
by a citizen (other than an Angel Investor).
 Subject to other conditions to be specified by MoF.
4. Venture capital management company (VCMC)
Incentive:
Tax exemption on income from the share of profits with a VCC on any
investment made by the VCC as stipulated in the agreement.
Treasury Management Centre (TMC)
A company providing centralised treasury management services (applications
by 31 December 2016) to its group of related companies (within or outside
the country) in Malaysia.
Incentive:
 70% tax exemption on statutory income arising from qualifying treasury
services rendered to related companies for 5 years.
 Withholding tax exemption on interest on borrowings from non-resident
person for the purpose of providing qualifying services.
 Stamp duty exemption on instruments of loan agreements and service
agreements for qualifying activities executed between 8 October 2011 and
31 December 2016.
 Expatriates are taxed only on the portion of their chargeable income
attributable to the number of days they are in Malaysia.
Tun Razak Exchange (TRX) (formerly known as Kuala
Lumpur International Financial District)
Incentives for TRX status companies:
 100% tax exemption for a period of 10 years
Incentives for TRX Marquee status companies:
 Stamp duty exemption on the following instruments executed by TRX
Marquee status company:
Instruments
Execution period
Instruments of transfer for purchase of commercial
property
-
Loan agreement, any lease or agreement for lease of
commercial property
31 January 2013 to
31 December 2020
Service agreement
1 January 2014 to
31 December 2022
29
TAX INCENTIVES
 Industrial building allowance and accelerated capital allowance.
 Additional 50% tax deduction of rental payment incurred for building used
for business in TRX.
 Deduction of relocation cost incurred to relocate to TRX.
Incentives for property developers in TRX:
 70% tax exemption for a period of 5 years for property developers in TRX.
Business Trust (BT)
BT established under the CMSA.
Incentive (provided on one-off basis at the initial stage of establishment):
 Stamp duty exemption on instruments of transfer of businesses, assets or
real properties to a BT for instruments executed from 1 January 2013 to 31
December 2017.
 RPGT exemptions for disposal of real properties or shares in a real
property company to a BT from 1 January 2013 to 31 December 2017.
E. GREEN INCENTIVES
Conservation of energy
Applications for the incentive must be made by 31 December 2015.
Providing energy conservation services
Conserving energy for own consumption
Tax exemption of 100% of statutory
income for 10 years,
or
ITA of 100% QCE incurred within 5
years to be offset against 100%
statutory income
ITA of 100% QCE incurred within 5
years to be offset against 100%
statutory income
Import duty and sales tax exemption on energy conservation equipment not
produced locally.
Sales tax exemption on purchase of equipment from local manufacturers.
Green Building Index (GBI) Certification
A person (resident in Malaysia) who has obtained a GBI certificate issued by
the Board of Architects Malaysia from 24 October 2009 until 31 December
2014.
Incentive:
Exemption of statutory income equal to the amount of qualifying expenditure
incurred for the purpose of obtaining the GBI certificate.
30
TAX INCENTIVES
“Qualifying expenditure” means additional expenditure incurred for
construction of a building, alteration, renovation, extension or improvement of
an existing building or plant or machinery.
Renewable energy source
Applications for the incentives must be made by 31 December 2015.
Generating renewable energy from
Generating renewable energy for own
biomass, hydropower (not exceeding 10 consumption
MW) or solar power
Tax exemption of 100% of statutory
income for 10 years,
or
ITA of 100% QCE incurred within 5
years to be offset against 100%
statutory income
ITA of 100% QCE incurred within 5
years to be offset against 100% statutory
income
Import duty and sales tax exemption on equipment used to generate energy from
renewable sources not produced locally
Sales tax exemption on purchase of equipment from local manufacturers
Green Technology
Incentive:
 Investment Tax Allowance for purchase of green technology equipment.
 Income tax exemption on the income from the use of green technology
services and system.
F. HEALTHCARE & WELLNESS
Private healthcare facilities
Resident incorporated company that undertaking new private healthcare
facility business or expansion, modernization, refurbishment of an existing
private healthcare facility business.
Incentive:
Tax exemption of statutory income of its qualifying project equal to 100% of
QCE incurred for 5 years (for application received from 1 January 2010 to 31
December 2014).
31
TAX INCENTIVES
Health tourism
Healthcare service provider resident in Malaysia offering services to foreign
clients in Malaysia.
Incentive:
Allowance for increase in export equal to 100% of the value of increased
export to be offset against 70% of statutory income (YA 2010 to YA 2014).
Medical Tourism
New and existing company that undertakes expansion, modernization,
refurbishment to provide private healthcare facility to at least 5% healthcare
traveller from their total patients.
Incentive:
Tax exemption of statutory income equal to 100% of QCE incurred for 5
years (for application received from 1 January 2015 to 31 December 2017).
Mines Wellness City (MWC)
Application received by MIDA on or after 1 January 2013
MWC Developers
undertaking development
activities in MWC
MWC Development
Managers undertaking
activities in MWC
Tax exemption of 100% of Tax exemption of 100% of
statutory income until YA
statutory income until YA
2023;
2023
or
Tax exemption of 100% of
statutory income derived
from rental of a MWC
building until YA 2026;
and
50% stamp duty
exemption on instruments
of transfer or lease of land
or building until 31
December 2023
32
MWC Operators
undertaking qualifying
activities in MWC
Tax exemption of 70%
of statutory income for
a period of 5 years;
or
ITA of 60% QCE
incurred within 5 years
to be offset against
70% statutory income
Applications received
by MIDA from 1
January 2013 until 31
December 2026
TAX INCENTIVES
G. INFORMATION AND COMMUNICATION TECHNOLOGY
Cost of developing websites
Expenditure incurred on development of an electronic commerce enabled
websites for a business is given an annual deduction of 20% for 5 years.
Offshore trading via website in Malaysia
An approved offshore trading company trading with non-residents through a
website in Malaysia, in foreign goods for consumption outside Malaysia.
Incentive:
Income tax exemption based on a specified formula for a period of 5 years.
H. OTHER INCENTIVES
Proprietary rights
Manufacturing company with at least 70% owned by Malaysian which
acquires proprietary rights (e.g. patents, industrial design, trademarks) to be
used for purposes of the business.
Incentive:
Deduction on the cost of acquisition of the proprietary rights to be claimed
over a period of 5 years.
Childcare centre
Private childcare centre registered with the Department of Social Welfare.
Incentive:
 Tax exemption on income from the business of the childcare centre for 5
years.
 IBA at annual rate of 10% for building used as childcare centre.
Small Malaysian Service Providers
Enterprise fully owned by Malaysian in certain service sectors, which has
annual sales turnover of less than RM5 million or less than 50 full-time
employees, and carried out a scheme of merger or acquisition approved by
the Small and Medium Enterprises Corporation Malaysia.
Incentive:
 Flat tax rate of 20% on all taxable income for 5 years from date of
completion of the merger (applications received within 3 years from 3 July
2012).
33
TAX INCENTIVES
 Stamp duty exemption on certain instruments executed pursuant to the
scheme mentioned above from 3 July 2012 to 2 July 2015.
Anchor Companies under Vendor Development Programme
(VDP)
Anchor companies that implement VDP and have the Memorandum of
Understanding with Ministry of International Trade and Industry (MITI) signed
from 1 January 2014 to 31 December 2016.
Incentive:
Double deduction (for 3 YAs) for expenses incurred (not exceeding
RM300,000 per year) to carry out specified activities in relation to product
development, capability improvement and human capital development.
Acquisition of foreign owned company
Malaysian incorporated company carrying on business of manufacturing or
providing selected services in Malaysia approved by Malaysian Investment
Development Authority (MIDA) acquires a foreign owned company and uses
the high technology to increase performance or enhancement of technology
and processes of the company’s operation in Malaysia.
 An annual deduction of 20% of the cost of acquisition of foreign owned
company for 5 years
Special deduction for audit fees
Single deduction of the statutory audit fee incurred.
Industrial Area Management
Private sector maintaining public facilities or infrastructure.
Incentive:
Managing, maintaining and
100% tax exemption for a period of 5
upgrading industrial estates in years
less developed area
Managing industrial estates in
other areas
70% tax exemption for a period of 5
years
34
TAX INCENTIVES
I. REFINERY AND PETROCHEMICAL INTEGRATED
DEVELOPMENT (RAPID)
Petroliam National Berhad (Petronas), related companies of Petronas or
companies which Petronas has an equity holding and carries out qualifying
activity (QA) within RAPID complex.
Incentive:
 Withholding tax exemption on payments received by non-resident.
 100% of QCE to be offset against 100% of statutory income for 10
consecutive YAs.
 100% of QCE to be offset against 100% of statutory income for 5
consecutive YAs for reinvesting after the initial 10 years (as stated above)
has expired.
 Tax exemption for 15 consecutive YAs on income derived by Malaysian
resident company from QA in RAPID complex and a 50% income tax
exemption for a further 5 YAs immediately after the expiry of the first 15
YAs.
 Stamp duty exemption on all instruments in relation to QA in RAPID
complex executed from 10 October 2011 to 31 December 2021.
 Deduction of pre-commencement expenses within 4 years from
commencement of the QA, which must be on or after 1 October 2010.
J. REGIONAL OPERATIONS
International Procurement Centre (IPC)
Company incorporated in Malaysia with the following criteria:
 minimum paid-up capital of RM500,000 and minimum annual business
spending of RM1.5 million;
 handling of goods directly through Malaysian ports and airports;
 minimum turnover of RM50 million by third year of operations.
Incentive:
 Tax exemption on income for 10 years excluding income from local sales
exceeding 20% of total sales, subject to annual turnover exceeding
RM100 million and other conditions.
 Customs duties exemption on import of raw materials, components or
finished products into Free Zones or licensed manufacturing warehouses
for repacking, cargo consolidation and integration before distribution to
final consumers.
 Expatriate posts to be granted based on needs.
 Foreign currency accounts to retain export proceeds are allowed.
35
TAX INCENTIVES
International trading company
Company incorporated in Malaysia with the following criteria:
 registered with MATRADE and at least 60% Malaysian owned equity;
 has minimum annual sales turnover of RM10 million;
 uses local services for banking, finance, insurance and use local ports and
airports.
Incentive:
Tax exemption equivalent to 20% of the increased export value to be offset
against 70% of statutory income for 5 years.
Operational Headquarters (OHQ) company
Company incorporated in Malaysia with the following criteria:
 providing qualifying services approved by Malaysian Investment
Development Authority (MIDA) to its offices or related companies within or
outside Malaysia;
 paid-up capital of at least RM500,000 with minimum annual business
spending of RM1.5 million.
Incentive:
Tax exemption on for 10 years excluding income from qualifying services
provided to related companies in Malaysia exceeding 20% of total income
from qualifying services.
Regional Distribution Centre (RDC)
Company incorporated in Malaysia with the following criteria:
 minimum paid-up capital of RM500,000 and minimum annual business
spending of RM1.5 million;
 annual turnover of RM100 million or more.
Incentive:
 Tax exemption for 10 years excluding income from local sales exceeding
20% of total sales.
 Import duty and sales tax exemption on goods for distribution.
 Expatriate posts granted based on needs.
Global Incentive for Trading (GIFT) programme
Labuan company which trades in physical and related derivative instruments
of the following commodities in foreign currency can apply to Labuan FSA to
be under the GIFT programme:
(a) petroleum and petroleum-related products including liquefied natural
gas (LNG);
36
TAX INCENTIVES
(b) minerals and base minerals;
(c) Agriculture products;
(d) Refined raw materials; and
(e) Chemicals.
Incentive:
(i) 3% tax rate on chargeable profits as reflected in audited accounts; or
(ii) Tax exemption on chargeable profit for first 3 years of its operation if the
company is licenced before 31 December 2014 to be purely in the trading
of LNG. Thereafter, it will be subject to tax as per (i) above.
K. RESEARCH AND DEVELOPMENT (R&D)
Income Tax Exemption and Investment Tax Allowance
Entity
Approved research company or
institution
Company undertaking approved
in-house R&D projects
Contract R&D company which
provides R&D services to third
parties
Incentive
100% tax exemption on adjusted income for
5 years
ITA of 50% on QCE for 10 years to be set off
against 70% of statutory income.
PS with 100% tax exemption on statutory
income for 5 years; or ITA of 100% on QCE
for 10 years to be set off against 70% of
statutory income.
R&D company undertaking
projects for its own group and
third parties
ITA of 100% on QCE for 10 years to be set
off against 70% of statutory income
Double deduction
- Revenue expenditure incurred on approved research.
- Cash contributions to approved research institutions.
- Payment for services of approved research companies or institutions /
contract R&D companies / non-related R&D companies / related R&D
companies which are not enjoying the ITA incentive.
Industrial building allowance
QCE incurred on buildings used for approved research.
37
TAX INCENTIVES
Commercialisation of resource-based and non-resource
based R&D findings
 Investor company
- incorporated and tax resident in Malaysia and owns at least 70% of the
equity of the company that commercialises resource-based or nonresource based R&D findings
Incentive:
Tax deduction equivalent to the amount of investment made in subsidiary
(Applications received from 11 September 2004).
 Company undertaking commercialisation project
- incorporated in Malaysia with at least 70% Malaysian equity ownership
Incentive:
PS with 100% tax exemption on statutory income for 10 years
(Applications received from 29 September 2012 until 31 December 2017)
Commercialisation of R&D findings is within a year from approval of the
incentive.
L. LOGISTIC
Shipping
A resident person (including a partnership) carrying on a business of
transporting passengers or cargo by sea on Malaysian ships or time or
voyage charter of Malaysian ships owned by that person.
Incentive:
Income tax exemption of: 100% of statutory income until YA 2013; and
 70% of statutory income from YA 2014.
Integrated logistics services (ILS)
A company or a group operation (at least 60% Malaysian owned) undertaking
ILS. 3 principal activities of freight forwarding, transportation and
warehousing and 1 additional other designated activity must be undertaken.
Incentive:
 PS with 70% tax exemption on statutory income for 5 years; or
 ITA of 60% on QCE for 5 years to be set off against 70% of statutory
income.
38
TAX INCENTIVES
M. SPECIAL ECONOMIC CORRIDORS
Iskandar Malaysia (IM)
IDR-status company is eligible for 100% tax exemption on statutory income
derived from qualifying activities provided to any person situated both within
an approved node and outside Malaysia; or outside Malaysia only, for 10
years.
Developer is eligible for 100% tax exemption on statutory income from:
(a) disposal of rights over land in an approved node (until YA 2015); and
(b) rental or disposal of a building located in an approved node (until YA
2020).
Development manager is eligible for 100% tax exemption on statutory
income from provision of management, supervisory or marketing services to
developers (until YA 2020).
N. TOURISM, HOTELS AND EXHIBITIONS
Conference promotion
Resident conference promoter organising conferences held in Malaysia
where at least 500 foreign participants are brought in annually.
Incentive:
100% tax exemption on statutory income from organising conferences.
Domestic tours
Resident company organising domestic tour packages where the total local
tourists is 1,500 or more per year.
Incentive:
Tax exemption on income from domestic tour packages (YA 2013 to YA
2015).
Group inclusive tours
Resident incorporated company carrying on an inbound tour operating
business approved and registered with the Ministry of Tourism and Culture
Malaysia where inbound tourists from outside Malaysia is 750 or more for the
period .
Incentive:
Tax exemption on income from such tours (YA 2013 to YA 2015).
39
TAX INCENTIVES
International trade exhibition
Resident incorporated company organising international trade exhibitions
approved by MATRADE held in Malaysia with at least 500 foreign visitors per
year.
Incentive:
100% tax exemption on statutory income from organising exhibitions.
4 and 5 star hotels
Applications must be received by 31 December 2016.
New investment in Sabah and
Sarawak
New investment in Peninsular
Malaysia
Tax exemption under PS of 100% of
statutory income for 5 years,
or
ITA of 100% of QCE incurred within
5 years to be offset against 100% of
statutory income.
Tax exemption under PS of 70% of
statutory income for 5 years,
or
ITA of 60% of QCE incurred within 5
years to be offset against 70% of
statutory income.
All hotels
Hotels registered with the Ministry of Tourism and Culture Malaysia which are
expanding, modernising and renovating, are eligible for 60% ITA to be set off
against 70% of statutory income for 5 years.
O. FURTHER / DOUBLE DEDUCTION
Examples of expenses that qualify for double deduction:
 Allowances paid by a company to participants of the Capital Market
Graduate Training Scheme for unemployed graduates, for 3 years from
the date of certification of the Training Scheme.
 Expenditure incurred by companies on the training of employees under an
approved training program.
 Expenditure incurred by companies on the training of employees to obtain
industry recognised certifications and professional qualifications
approved by agencies appointed by the Minister of Finance (w.e.f YA
2015).
 Expenses incurred in obtaining recognized quality systems, standards and
halal certification.
 Expenses incurred in the promotion of Malaysia as an International
40
TAX INCENTIVES
Islamic Financial Centre (YA 2008 to YA 2015).
 Expenditure incurred on advertising Malaysian brand names registered
locally or overseas and professional fees paid to companies promoting or
advertising Malaysian brand names.
 Export credit insurance premiums based on takaful concept.
 Freight charges paid by manufacturers exporting rattan and wood-based
products, excluding sawn timber and veneer (until YA 2015).
 Freight charges incurred by manufacturers for shipping goods from
Sabah and Sarawak to any ports in Peninsular Malaysia.
 Insurance premiums for the import and export of goods where risks are
insured with an insurance company incorporated in Malaysia (until YA
2015).
 Promotional expenditure incurred on seeking opportunities for the
export of manufactured products, agricultural produce and services.
 Remuneration paid to an employee who is physically or mentally
handicapped.
 Expenditure incurred by companies in conducting an approved
internship programme for students pursuing full-time degree programme
in higher education institution (YA 2012 to YA 2016).
 Expenditure incurred by companies in conducting an approved
internship programme for students in vocational and diploma courses (YA
2015 to YA 2016).
 Expenditure incurred by private companies in providing scholarships to
Malaysian students pursuing study at diploma and bachelor’s degree in
local institutions of higher learning registered with the Ministry of Higher
Education (YA 2012 to YA 2016).
 Expenditure incurred by companies in participating in career fairs abroad
that are endorsed by TalentCorp (YA 2012 to YA 2016).
 Expenditure incurred by employers for the provision and maintenance of
child care centres.
 Childcare allowance given by employers to employees.
 Interest expense and all costs involved in obtaining loans by a rescuing
contractor to revive an abandoned housing project for 3 consecutive YA
(for applications 1 January 2013 to 31 December 2015).
 Salary cost being the difference between the original wages and the
minimum wages paid under the minimum wages policy by SMEs,
cooperatives, associations and organizations employers (from 1 January
2014 to 31 December 2014).
41
INCOME EXEMPT FROM TAX
 Training and consultancy fees to design an appropriate Flexible Work
Arrangement for 3 YAs (for applications received by TalentCorp from 1
January 2014 to 31 December 2016).
 Expenses for Goods and Services Tax (GST) related training of
employees in accounting and information & communication technology
(YA 2014 to YA 2015).
 Expenditure incurred by companies participating in Skim Latihan
1Malaysia for unemployed graduates (from 1 June 2012 to 31 December
2020).
 Scholarships provided by companies to Malaysian students pursuing
study in the vocational and technical fields in institutions recognised by the
Government (YA 2015 to YA 2016).
INCOME EXEMPT FROM TAX
Income exempt from tax includes:
 Compensation for loss of employment and payments for restrictive
covenants:
- fully exempted if due to ill health; or
- RM10,000 for every completed year of service with the same employer
or with companies in the same group if not due to ill health.
 Death gratuities or sums received as consolidated compensation for
death or injuries.
 Dividends paid, credited or distributed by co-operative societies to their
members.
 Fees or honorarium (not part of official duties) for validating, moderating
or accrediting franchised educational programmes in higher educational
institutions which are verified by the National Accreditation Board.
 Foreign income of any person (other than a resident company carrying
on the business of banking, insurance or sea or air transport) arising from
sources outside Malaysia and remitted into Malaysia.
 Grant or subsidy received from the Federal or State Government.
 Housing and Labuan Territory allowance received by a Malaysian
citizen from an employment in Labuan with a Labuan entity (exempt to the
extent of 50% of gross allowance) (YA 2011 to YA 2020).
 Income arising from transactions made under a Securities Borrowing
and Lending Agreement to a borrower and a lender arising from a loan of
securities listed on Bursa Malaysia and the return of the same or
equivalent securities, and the corresponding exchange of collateral, in
respect of securities borrowing and lending transactions (excludes
42
INCOME EXEMPT FROM TAX
dividends, lending fees, interest earned on collateral and rebates).
 Income from employment on board a ship (defined) used in a business
operated by a resident owner of a ship registered under the Merchant
Shipping Ordinance 1952.
 Income from director’s fees received by a non-Malaysian citizen director
of a Labuan entity (YA 2011 to YA 2020).
 Income of any person from the provision of qualifying professional
services rendered in Labuan to a Labuan entity is exempt to the extent of
65% of the statutory income (YA 2011 to YA 2020).
 Income of a non-Malaysian citizen from exercising of an employment in
a managerial capacity with a Labuan entity in Labuan, co-located office or
marketing office is exempt to the extent of 50% of gross income from the
employment (YA 2011 to YA 2020).
 Interest accruing to any person for bonds issued under the Bon Simpanan
Malaysia Siri Kedua (BSM 2) by Bank Simpanan Nasional.
 Interest paid or credited to any person in respect of:
- any savings certificate issued by the government.
- Islamic securities originating from Malaysia, other than convertible loan
stock, issued in any currency other than Ringgit and approved by SC or
the Labuan FSA.
 Interest income derived by non-resident persons from a bank or finance
company licensed under Banking and Financial Institutions Act 1989 (now
known as the Financial Services Act 2013) or Islamic Banking Act 1983
(now known as the Islamic Financial Services Act 2013), or any other
financial institution approved by the Minister of Finance.
 Interest income paid or credited by non-resident companies from:
- securities issued by the Government; or
- Islamic securities or debentures issued in Ringgit Malaysia, other than
convertible loan stocks, approved by the SC.
 Interest or bonus, gains or profits received by a resident individual from
deposits placed in licensed institutions.
 Interest paid or credited to any individual in respect of Merdeka bonds
issued by the Central Bank of Malaysia.
 Interest or discount paid or credited to any individual, unit trust and listed
closed-end fund in respect of:
- bonds or securities issued or guaranteed by the Government;
- debentures or Islamic Securities, other than convertible loan stock,
approved by the SC; or
- Bon Simpanan Malaysia issued by the Central Bank of Malaysia.
43
INCOME EXEMPT FROM TAX
 Pensions paid to a person, which is derived from an employment
exercised in Malaysia where:
- the recipient has reached the age of 55 or the compulsory retirement
age; or
- retirement is due to ill health.
 Perquisites (in cash or in kind) for long service (more than 10 years of
employment with the same employer), past achievement or service
excellence, innovation, or productivity award up to an amount or value of
RM2,000 a YA.
 Profit earned by individual investors from investments made through
Investment Account Platform is exempted from tax for 3 consecutive years
starting from the first year profit is earned.
 Retirement gratuities are fully exempt:
- where the retirement is due to ill health, or on or after reaching the age
of 55 or other compulsory age of retirement, from an employment which
has lasted 10 years with the same employer or with companies in the
same group; or
- upon reaching compulsory retirement age pursuant to an employment
contract or collective agreement at the age of 50 but before 55 and that
employment has lasted 10 years with the same employer or with
companies in the same group.
 Royalties received by non-resident franchisors from registered private
higher educational institutions for approved franchised educational
programmes.
 Royalties received by an individual resident in Malaysia in respect of:
Publication of, or the use of, or the right to use,
any artistic work
Recording discs or tapes
Publication of, or the use of, or the right to use,
any literary work or any original painting
Any musical composition
Amount exempted per YA
RM
10,000
10,000
20,000
20,000
 Statutory income derived from members’ subscription fees received
by trade associations.
 Statutory interest income derived by resident banks or financial
institutions for 3 consecutive YAs from a rescuing contractor or developer
of an abandoned project (for loans applied from 1 January 2013 to 31
December 2015).
44
REAL PROPERTY GAINS TAX
REAL PROPERTY GAINS TAX (RPGT)
Scope
Every person whether or not resident in Malaysia is chargeable to RPGT on
gains arising from the disposal of real property and shares in real property
company (RPC).
Real property is defined as any land situated in Malaysia and any interest,
option or other right in or over such land. A RPC is a controlled company
holding real property or shares in another RPC as a major asset (i.e. defined
value not less than 75% of the value of its total tangible assets).
The RPGT rates are as follows:
Disposal
RPGT rates effective 1 Jan 2014
Individuals
(Citizens &
Individuals
Permanent
(Non Citizens)
Residents)
30%
30%
20%
30%
15%
30%
0%
5%
Companies
Within 3 years
In the 4th year
In the 5th year
In the 6th and
subsequent years
Disposal
Up to 2 years
Exceeding 2 until 5
years
Exceeding 5 years
30%
20%
15%
5%
RPGT rates for companies and individual
1 Jan 2010 to
1 Jan 2012 to
1 Jan 2013 to
31 Dec 2011
31 Dec 2012
31 Dec 2013
5%
10%
15%
5%
5%
10%
0%
0%
0%
Withholding of RPGT
With effect from 1 January 2010, where the consideration consists of wholly
or partly of money, an acquirer of chargeable asset must withhold 2%* of the
total value of the acquisition price to be paid or the whole of that money to the
IRB within 60 days from the date of disposal.
* W.e.f 1 January 2015, the retention rate will be increased from 2% to 3%
45
REAL PROPERTY GAINS TAX
Exemptions
The following are examples of some exemptions from RPGT:
 an amount of RM10,000 or 10% of the chargeable gain, whichever is
greater, accruing to an individual.
 gain accruing to an individual who is a citizen or a permanent resident in
respect of the disposal of one private residence.
 gain accruing to the Government, State Government, or a local authority.
 disposal of assets in connection with securitization of assets from 1
January 2001.
 disposal of assets to REIT and Property Trust Funds.
 disposal of assets in relation to Sukuk Kijang with effect from 25 July 2013.
 gain accruing on the conveyance of chargeable asset upon conversion of
a conventional partnership or private company to a limited liability
partnership.
In certain transactions such as the following, the disposal price is deemed to
be equal to acquisition price:
 transfer of assets between spouses.
 gifts made to the Government, State Government, local authority or
approved charity.
 disposal of asset as a result of compulsory acquisition under law.
 disposal of chargeable asset pursuant to a scheme of financing approved
by the Central Bank of Malaysia, Labuan FSA, Malaysian Co-operation
Societies Commission or the SC as a scheme which is in accordance with
the principles of Syariah.
46
SERVICE TAX
SERVICE TAX
Basis of taxation
Service tax is a consumption tax levied and charged on any taxable service
provided by any taxable person.
Service tax will be replaced with a single broad based Goods and Services
Tax (GST) effective from 1 April 2015.
Rate of tax
The rate of service tax is 6% ad valorem effective from 1 January 2011
(previously 5%). This tax is levied on all taxable services, except for the
provision and issuance of charge or credit card, the service tax is as follows:(i) RM50 per year on the principal card; and
(ii) RM25 per year on the supplementary card.
The service tax is chargeable on the date of the issuance of the card and
every 12 months thereafter or part thereof after the issuance of the card or on
the date of the renewal of the card and every 12 months thereafter or part
thereof after the renewal of the card.
Taxable person/licensing
Any taxable person who carries on business of providing taxable service
must apply for a licence, and the term “person” includes an individual, a firm,
society, association, a company and every other juridical person.
No fee is payable for the issuance of a licence.
Taxable persons and taxable services
A complete list of taxable persons and taxable services can be found in the
Second Schedule to the Service Tax Regulations 1975. The following is a
summary:
Taxable person
Operators of hotels with more than 25 rooms (subject to
some exclusions)
Operators of restaurants, bars, snack-bars, coffee houses
or places located in hotels with more than 25 rooms,
providing food, drinks and tobacco products wholly eat-in
or partly take-away
47
Annual sales
turnover (RM)
*
*
SERVICE TAX
Taxable person
Operators of restaurants, bars, snack-bars, coffee houses
or places located outside hotels, providing food, drinks
and tobacco products wholly eat-in or partly take-away
(subject to some exclusions)
Operators of food courts
Operators of night-clubs, dance halls and cabarets
Operators of approved health-centres and massage
parlours
Operators of 1st, 2nd or 3rd Class Public
House and 1st or 2nd Class Beer House
Operators of private clubs
Operators of golf course or golf driving range (including
operators of private clubs having total annual sales
turnover of RM300,000 or less or any hotel having 25 or
less rooms)
Licensed private hospitals
Insurance companies
Any person providing communication services who is
registered under the Communications And Multimedia Act
1998 or licensed under the Communications and
Multimedia (Licensing) Regulations 2000
Any person who is given permission to act as agent for
transacting business relating to the import or export of any
goods or luggage under section 90 of the Customs Act
1967
Any person who is licensed under section 65 or 65E of the
Customs Act 1967 and who is also given permission to
act as an agent for transacting business relating to the
import or export of any goods or luggage that is stored in
the licensed warehouse or inland clearance depot
Operators of parking space for motor vehicles
Courier-services companies
Operators of motor vehicles service and/or repair centres
Licensed private agencies
Employment agencies
Hire-and-drive car and hire-car service companies
Advertising companies
Public Accountants
Advocates and Solicitors
48
Annual sales
turnover (RM)
3 million
(Effective 1 July
2008)
3 million
(Effective 1 July
2008)
*
*
*
300,000
*
300,000
*
*
*
*
150,000
150,000
150,000
150,000
150,000
300,000
300,000
**
**
SERVICE TAX
Taxable person
Professional Engineers
Architects
Licensed or Registered Surveyors/Registered Valuers,
Appraisers and Estate Agents
Consultants (subject to some exclusions)
Management companies
Any person who is regulated by Bank Negara Malaysia
and provides credit card or charge card services through
the issuance of a credit card or a charge card
Annual sales
turnover (RM)
**
**
**
**
**
*
* No threshold
** No threshold effective 1 January 2008
Taxable services
Taxable services include the provision of rooms for lodging/sleeping
accommodation, health services, certain professional services, certain
telecommunication services including bandwidth services and certain value
added services, management services, security services, provision of parking
space, provision of golf course, golf driving range or services related to golf or
golf driving range, courier delivery services (other than to destinations outside
Malaysia), provision and issuance of charge card or credit card whether or
not annual subscription or fee is imposed, the sale or provision of food, drinks
and tobacco products and paid broadcasting services.
With effect from 1 January 2003, certain professional services provided to
companies within the same group would not be taxable subject to certain
qualifying criteria.
Payment of service tax/taxable period
Service tax is due when payment is received for taxable services rendered. If
payment is not received within 12 calendar months from the date of issuance
of invoice, the tax is due on the day immediately after the expiry of the 12month period.
Any service tax that falls due during a taxable period, which is 2 calendar
months, is payable to the customs authorities within 28 days after the end of
the taxable period.
49
SALES TAX
Refund of service tax on doubtful debts or “bad debts”
A licensee is eligible for a refund of service tax in relation to debts deemed as
“bad debts” or provided as doubtful debts, subject to conditions. This includes
debts which cannot be collected after 6 months from the date of payment of
tax.
SALES TAX
Basis of taxation
Sales tax is a single-stage tax imposed on certain locally manufactured
goods, and on similar goods imported. Labuan, Langkawi, Tioman and Free
Zones, do not fall within the ambit of this tax. Sales tax is a consumption tax
and under the system, the onus is on the manufacturers to levy, charge and
collect the tax from their customers.
In the case of imported goods, sales tax is collected from the importer at the
time the goods are released from customs control.
Sales tax will be replaced with a single broad based Goods and Services Tax
(GST) effective from 1 April 2015.
Value of goods
The valuation of goods for sales tax purposes is based on the World Trade
Organsation (WTO) principles of customs valuation.
Rates of tax
Sales tax is generally an ad valorem tax. Specific rates of sales tax are
currently only imposed on certain classes of petroleum (generally, refined
petroleum). The ad valorem rates are as follows:
Class of goods
Fruits, certain foodstuff, timber and building materials
Cigarettes and tobacco
Liquor and alcoholic drinks
All other goods, except petroleum subject to specific rates
and goods not specifically exempted
Rate %
5
5
5
10
Taxable goods
All goods manufactured in Malaysia or imported are taxable unless they are
specifically exempted by order of the Minister of Finance.
50
SALES TAX
Goods exempted
 All exports are exempted from sales tax.
 Goods which are specifically exempted include:
- Live animals, fish, seafood and certain essential food items including
meat, milk, eggs, vegetables, fruits, bread, etc.
- Medical and educational equipment including sports equipment, books,
etc.
- Photographic equipment and films.
- Motorcycles below 201 c.c. capacity, bicycles for adult use including
parts and accessories.
- Machinery for textile industry, food preparation industry, paper and
printing industry, construction industry, metal industry, etc.
- Primary commodities including cocoa, rubber and their related
products.
- Naturally occurring mineral substances, chemicals, etc.
- Helicopters, aircraft, ships and other vessels.
Licensing
No person is permitted to manufacture taxable goods unless the person is
duly licensed as a licensed manufacturer. The term “manufacture” in relation
to goods other than petroleum, means the conversion by manual or
mechanical means of organic or inorganic materials into a new product by
changing the size, shape or nature of such materials and includes the
assembly of parts into pieces of machinery or other products but does not
include the installation of machinery or equipment for the purpose of
construction. In relation to petroleum, the term “manufacture” means refining
or compounding and includes the addition of foreign substance.
Exemption from licensing
A manufacturer of taxable goods whose total sales value did not exceed
RM100,000 in the preceding year and is not expected to exceed RM100,000
during the next twelve months may apply for a certificate of exemption from
licensing. The certificate is renewable on a yearly basis. However, such
manufacturer may choose to be licensed in order to enjoy tax-free inputs.
In addition, certain manufacturing operations are also exempted from the
licensing requirements. They include the developing and printing of
photographs and production of film slides, preparation of ready-mixed
concrete, repacking of bulk goods, repair of second hand goods and the
installation of air conditioners in motor vehicles.
51
IMPORT DUTIES
Tax-free raw material
In order to maintain the single-stage concept, there are facilities available to
allow for inputs (raw materials and components) to be imported or acquired
free of sales tax by a licensed manufacturer for use in the manufacturing
process.
Drawback
A licensed manufacturer or importer can claim drawback on the sales tax
paid in respect of goods, which are subsequently exported.
Payment of sales tax/taxable period
Generally, sales tax shall be due at the time the taxable goods are sold, or
disposed of otherwise than by sale by the taxable person. Any sales tax that
falls due during any taxable period, which is normally 2 calendar months,
shall be paid to the customs authorities within 28 days from the expiration of
the taxable period. However, in relation to the classes of petroleum that are
subject to sales tax, special provisions apply regarding the time when sales
tax is due and payable.
Refund of sales tax on doubtful debts or “bad debts”
A licensee is eligible for a refund of sales tax in relation to debts deemed as
“bad debts” or provided as doubtful debts”, subject to conditions. This
includes debts which cannot be collected after 6 months from the date of
payment of tax.
IMPORT DUTIES
Rates of duties
Import duties are levied on goods that are subject to import duties and
imported into the country. Import duties are generally levied on an ad valorem
basis but may also be imposed on a specific basis. The ad valorem rates of
import duties range from 2% to 60%. Raw materials, machinery, essential
foodstuffs and pharmaceutical products are generally non-dutiable or subject
to duties at lower rates.
52
IMPORT DUTIES
Tariff rate quota
Effective 1 April 2008, Malaysia implemented tariff rate quota (TRQ) on
selected agricultural products, such as chicken, milk and cream, hen eggs,
cabbages. Under TRQ, the tariff charged depends on the volume of imports.
Imports within quota (volume) attract duties at a lower tariff rate while a
higher tariff rate applies on goods in excess of the quota volume “out-quota
tariff rate”. The quota applicable is determined by the relevant agency, e.g.
Department of Veterinary Services.
Value of goods
The value of goods for the purpose of computing import duties is determined
largely in accordance with the WTO principles of customs valuation.
Exemptions
There is a range of duty exemptions on specific goods that prescribed
persons are eligible to claim, subject to prescribed conditions under an Order
made by the Minister. In addition, manufacturers are eligible to apply for
merit-based duty exemptions on:
 raw materials and components used directly for the manufacture of goods
for export and domestic markets.
 dutiable machinery and equipment which are used directly in the
manufacturing process.
Approval is subject to Confirmation of Local Availability rule.
Manufacturers are required to apply to the relevant authorities for exemption.
Prohibition of imports
Import restrictions are seldom imposed except on a limited range of products
for protection of local industries or for reasons of security and public safety.
An import licence has to be obtained for the importation of prohibited goods.
53
GOODS AND SERVICES TAX
GOODS AND SERVICES TAX (GST)
Effective date and rate of tax
GST is to be implemented in Malaysia effective from 1 April 2015 at a rate of
6%.
Scope of taxation
 GST is chargeable on all taxable supplies of goods and services made in
the course or furtherance of a business in Malaysia by a taxable person.
 GST is also charged on the importation of goods and services into
Malaysia.
 Supplies made by the Federal and State Government departments are not
within the scope of GST except for some services prescribed by the
Minister of Finance. Supplies made by the local authorities and statutory
bodies in relation to regulatory and enforcement functions are also not
within the scope of GST.
Taxable person and registration
 A taxable person is a person who makes taxable supplies in Malaysia with
annual turnover exceeding RM500,000. Such person is required to be
registered for GST.
 Calculation of annual turnover for registration is based on the total value of
taxable supplies for a 12 months period.
 A person who makes taxable supplies below the threshold are not required
to register but may register on a voluntary basis.
Type of supplies
1. Standard rate supply
Standard rated supply means goods and services supplied by businesses
that are subject to GST at the rate of 6%. All imported goods and services
except those prescribed as zero rated and exempt will be subject to GST
at the rate of 6%.
2. Zero-rated supply
Zero-rated supply means goods and services supplied by businesses
which are subject to a GST tax rate of zero percent. GST paid on their
inputs can be claimed as credits.
54
LICENSED MANUFACTURING WAREHOUSE
3. Exempt supply
Exempt supply means goods and services supplied by businesses that do
not attract GST, but GST paid on their inputs cannot be claimed as credit.
Details of the goods and services included under the above categories of
supplies can be obtained from the Royal Malaysian Customs Department’s
official portal http://gst.customs.gov.my
The Government has proposed to broaden the scope of items that will not be
subject to GST in order not to burden the rakyat. Among the items that are
proposed not to impose GST on or given GST relief are all types of fruits,
white bread and wholemeal bread, coffee/tea powder, various types of
noodles, the national essential medicine, reading materials, text books,
religious books, newspaper, 300 units of electricity and the retail sale of
RON95 petrol, diesel and LPG.
LICENSED MANUFACTURING WAREHOUSE (LMW)
Manufacturers who export 80% or more of their finished products can apply
for LMW status. Raw materials, components and machinery used in the
manufacturing process are exempted from import duties and sales tax.
FREE ZONE
A free zone is deemed to be a place outside Malaysia for customs purposes.
Subject to certain exclusions, goods and services can be brought into,
produced or provided in a free zone without payment of customs duty, excise
duty, sales tax or service tax.
FREE TRADE AGREEMENTS
Malaysia has concluded several regional and bilateral free trade agreements
and several more are still under negotiation. One of the key features of free
trade agreements is the preferential tariff treatment accorded to member
countries. Currently, the following free trade agreements are in force:
-
ASEAN Trade in Goods Agreement
ASEAN-China Free Trade Agreement
ASEAN-Korea Free Trade Agreement
ASEAN-Australia-New Zealand Free Trade Agreement
55
EXPORT DUTIES
-
ASEAN-Japan Comprehensive Economic Partnership Agreement
ASEAN-India Trade in Goods Agreement
Preferential Trade Agreement Amongst D-8 Member States
Malaysia-Pakistan Closer Economic Partnership
Malaysia-Japan Economic Partnering Agreement
Malaysia-Chile Free Trade Agreement
Malaysia-India Comprehensive Economic Cooperation Agreement
Malaysia-New Zealand Free Trade Agreement
Malaysia-Australia Free Trade Agreement
Malaysia-Turkey Free Trade Agreement
The preferential tariff treatment and the rules of origin may vary from one free
trade agreement to another.
EXPORT DUTIES
Export duties are generally imposed on the country’s main commodities such
as crude petroleum and palm oil for revenue purposes.
EXCISE DUTIES
Basis of taxation
Excise duties are imposed on a selected range of goods manufactured in
Malaysia or imported into Malaysia. Goods which are subject to excise duty
include beer/stout, cider and perry, rice wine, mead, undenatured ethyl
alcohol, brandy, whisky, rum and tafia, gin, cigarettes containing tobacco,
motor vehicles, motorcycles, playing cards and mahjong tiles.
Rates of duties
The rates of excise duties vary from a composite rate of 10 sen per litre and
15% for certain types of spirituous beverages, to as much as 105% for
motorcars (depending on engine capacity).
Excise licensing
Unless exempted from licensing, a manufacturer of tobacco, intoxicating
liquor or goods subject to excise duties must have a licence to manufacture
such goods.
A warehouse licence is required for storage of goods subject to excise duty.
56
STAMP DUTY
However, a licence to manufacture tobacco, intoxicating liquor or goods
subject to excise duty also permits the holder to store such goods.
Payment of duty
As a general rule, duty is payable at the time the goods leave the place of
manufacture. However, excise duty on a predefined list of motor vehicles for
transport of persons is not payable until the vehicles are registered with the
Road Transport Department, provided that a security is provided (up to
maximum of 4 years from the date of removal from the place of manufacture).
Exports
No excise duty is payable on dutiable goods that are exported.
STAMP DUTY
Basis of taxation
Stamp duty is chargeable on instruments and not on transactions. If a
transaction can be effected without creating an instrument of transfer, no duty
is payable.
An unstamped or insufficiently stamped instrument is not admissible as
evidence in a court of law, nor will it be acted upon by a public officer.
With effect from 1 January 2009, payment of stamp duty by way of electronic
medium is available for persons who have registered with the Collector.
Rates of duty
The rates of duty vary according to the nature of the instruments and
transacted values.
Generally, transfer of properties can give rise to significant stamp duty:
 Properties (other than shares or marketable securities)
On the first
Value
RM
100,000
On the next
400,000
In excess of
500,000
500,000
Rate
RM1 per RM100 or
part thereof
RM2 per RM100 or
part thereof
Duty payable
RM
1,000
8,000
9,000
RM3 per RM100 or
part thereof
57
STAMP DUTY
 Shares
RM3 for every RM1,000 or any fraction thereof based on consideration, or
value whichever is greater. The Stamp Office generally adopts one of the
3 methods for valuation of ordinary shares for purposes of stamp duty:
- price earnings ratio;
- net tangible assets; and
- sale consideration.
 Service Agreements and Loan Agreements
Stamp duty of 0.5% on the value of the services/loans. However, stamp
duty may be exempted or stamp duty in excess of 0.1% may be remitted
for the following instruments:
(i) Service agreement (executed on and after 1 January 2011):
Stamp duty
Ad valorem rate
of 0.1%
All service agreement (one tier)
Multi-tier service agreement
(a) Non-government contract (i.e.
between private entity and
service providers
(b) Government contract
(i.e. between Federal /State
Government of Malaysia or
State / local authority and
service providers)
First level
Subsequent
level(s)
First level
Second
level
Subsequent
level(s)
Ad valorem rate
of 0.1%
Up to RM50
Exempted
Ad valorem rate
of 0.1%
Up to RM50
(ii) Loan agreement / loan instrument:
Ringgit Malaysia loan agreements generally attract stamp duty at
0.5%. However, a reduced stamp duty liability of 0.1% is available for
RM loan agreements or RM loan instrument without security and
repayable on demand or in single bullet repayment.
Stamping
Instruments executed in Malaysia which are chargeable with duty must be
stamped within 30 days from the date of execution. When the instruments
are executed outside Malaysia, they must be stamped within 30 days after
they have first been received in Malaysia.
58
STAMP DUTY
Penalty
The penalty imposed for late stamping varies based on period of delay. The
maximum penalty is RM100 or 20% whichever is higher.
Relief/Exemption/Remission from stamp duty
Examples of the exemptions, remissions or reliefs of stamp duty available
are as follows:
Financing instrument
 Stamp duty exemption on instrument of agreement for a loan or financing
in relation to a Micro Credit Scheme (approved by the National Small and
Medium Enterprise Development Council) between a borrower and a
participant bank of financial institutions executed on or after 1 January
2012.
 Stamp duty exemption on all loan or financing instruments in relation to the
Professional Services Fund for an amount up to RM50,000 between a
borrower and Bank Simpanan Nasional executed on or after 1 January
2012
 Remission of 50% on loan agreement instrument to finance purchase of
only one unit of residential property by a Malaysian citizen at a price
not exceeding RM400,000 executed during 1 January 2013 to 31
December 2014 (extended to residential property priced not exceeding
RM500,000 executed from 1 January 2015 to 31 December 2016).
Provided the purchaser does not own any other residential property at the
date of execution of the sale and purchase agreement.
 Stamp duty exemption on instrument of loan agreement for the purchase
of a residential property priced up to RM300,000 under the PR1MA
Scheme executed from 1 January 2012 to 31 December 2016
 Stamp duty exemption on all instruments of an Asset Sale Agreement &
Asset Lease Agreement executed between customer and financier made
under Syariah law principles for renewing any Islamic revolving
financing facility, provided instrument for existing facility is duly stamped
(effective 13 September 2003)
 Stamp duty on any instruments of an Asset Lease Agreement executed
between a customer and a financier made under the Syariah principles for
rescheduling or restructuring any existing Islamic financing facility is
remitted to the extent of the duty that would be payable on the balance of
the principal amount of the existing Islamic financing facility, provided
instrument for existing Islamic financing facility has been duly stamped
(effective 13 September 2003)
59
STAMP DUTY
 Stamp duty exemption on all instruments relating to the purchase of
property by any financier for the purpose of lease back under the
principles of Syariah or any instrument by which the financier shall assume
the contractual obligations of a customer under a principal sale and
purchase agreement (effective 13 September 2003)
Instrument of transfer
 Relief on the transfer of assets between associated companies, where
either company owns 90% or more of the other company, or where a third
company owns 90% or more of both associated companies (conditions
apply).
 Remission of 50% of stamp duty chargeable on the instrument of transfer
of immovable property operating as voluntary disposition between
parent and child. Exemption for instruments of transfer of immovable
property operating as voluntary disposition between husband and wife.
 Remission of 50% on instruments of transfer for purchase of only one
unit of residential property by a Malaysian citizen at a price not
exceeding RM400,000 executed from 1 January 2013 to 31 December
2014 (extended to residential property priced not exceeding RM500,000
executed from 1 January 2015 to 31 December 2016). Provided the
purchaser does not own any other residential property at the date of
execution of the sale and purchase agreement.
 Stamp duty exemption on all instruments of transfer of land, business,
asset and share in relation to the conversion of a conventional
partnership or a private company to be a limited liability partnership
(effective 1 January 2013)
Scheme of merger, acquisition or amalgamation
 Relief on the transfer of the undertakings or shares under a scheme of
reconstruction or amalgamation of companies (conditions apply).
 Stamp duty exemption on the following instruments executed for a
scheme of merger or acquisition between qualifying Malaysian
service providers carried out from 3 July 2012 to 2 July 2015 and
approved by the Small and Medium Enterprises Corporation Malaysia:

Contracts or agreements for sale or lease of land, building,
machinery and equipment

Instrument of transfer and memorandum of understanding

Loan or financing agreement

First tenancy agreement
60
STAMP DUTY
Others
 Stamp duty exemption on specified instruments for the purpose of a
securitisation transaction executed on or after 1 January 2001.
 Stamp duty exemption on all instruments relating to the issue of, offer for
subscription or purchase of, or invitation to subscribe for or purchase
debentures or Islamic securities approved by the Securities
Commission and the transfer of such debentures or Islamic securities
(effective 1 July 2000).
 Stamp duty remission in excess of RM200 is remitted for all instruments of
contract notes relating to the sale of any shares, stock or marketable
securities:
listed on a stock market of an approved stock exchange (effective 17
March 2003); or
in companies in Malaysia or elsewhere between a local broker and an
authorised nominee on behalf of a foreign broker (effective 1
November 1998).
 Stamp duty exemption on all instruments executed by a Labuan entity in
connection with a Labuan business activity; including Memorandum and
Articles of Association and constitutional documents under which a
Labuan entity is established and all instruments of transfer of shares in a
Labuan entity (effective 11 February 2010).
61
ECONOMIC INDICATORS AND DIRECTIONS
ECONOMIC INDICATORS AND DIRECTIONS
Economic growth
The Malaysian economy to expand by 5.5%- 6% in 2014 and is expected to
sustain a positive growth of 5%-6% in 2015 driven by resilient domestic
demand, strong private investments and improved global economic
conditions. However, overall growth could be affected by a number of factors
including the Government’s fiscal consolidation, uneven global economic
recovery as well as closure of quantitative easing in the US.
Malaysia’s GDP growth
Source: Economic Report, 2014/2015
Economic growth by sector
The construction sector continues to lead growth at 12.7% on the back of
continued implementation of infrastructure projects. Growth in the
manufacturing sector escalated to 6.4% supported by resilient domestic
demand and recovery in the external sector, while agriculture’s growth of
3.8% was supported by higher palm oil yields.
62
ECONOMIC INDICATORS AND DIRECTIONS
GDP growth by sector
Economic growth by aggregate demand
Private consumption is projected to increase to 6.2% on the back of resilient
domestic demand. Whereas, private sector investments will continue to be
strong at 12.7% supported by ongoing implementation of Economic
Transformation Programme (ETP) and Government development projects.
Meanwhile, export momentum to remain sustainable going into 2015 is
backed by continued growth in both electrical and electronics (E&E), and non
E&E exports.
Inflation and interest rate
Inflation to reach 3.3% in 2014 and is expected to increase to 4%-5% in 2015
as domestic cost factors increases due to continued subsidy rationalization
and GST implementation. There will be a possible hike in interest rate in
2015, with a 0.25% increase in Overnight Policy Rate (OPR) to 3.50% in view
of US Federal Reserve monetary tightening measures.
63
ECONOMIC INDICATORS AND DIRECTIONS
Consumer price index (CPI) and OPR
*For the period of January – August 2014
Source: Economic Report, 2014/2015
Investments
Approved investments reached a new record of RM216.5 billion in 2013
(2012: RM167.8 billion). For the Jan-June 2014 period, MIDA approved
investments worth RM47.4 billion out of which foreign investments accounted
for 58.9% of total approved investments.
Approved investments
*For the period of January – June 2014
Source: MIDA, Economic Report, 2014/2015
64
FINANCIAL REPORTING
FINANCIAL REPORTING
The Malaysian Accounting Standards Board (MASB) has been established as
the sole authority for issuing accounting standards and other financial
reporting pronouncements in Malaysia. All financial statements prepared
pursuant to any law administered by the Securities Commission Malaysia,
Bank Negara Malaysia and the Companies Commission of Malaysia have to
comply with approved accounting standards issued by the MASB.
MASB Approved Accounting Standards for Entities other
than Private Entities
Entities other than Private Entities shall apply the Malaysian Financial
Reporting Standards (MFRS) Framework which is identical to the
International Financial Reporting Standards (IFRS), for annual periods
beginning on or after 1 January 2012, with the exception of Transitional
Entities (TEs). TEs are entities subject to the application of MFRS 141
Agriculture and/or IC Interpretation 15 Agreements for the Construction of
Real Estate.
TEs shall comply with the MFRS Framework for annual periods beginning on
or after 1 January 2017. They may apply the older Malaysian national GAAP
(known as Financial Reporting Standards Framework) for annual periods
beginning before 1 January 2017. An entity that consolidates or equity
accounts the TEs are also granted similar exception.
MASB Approved Accounting Standards for Private Entities
Private entities shall comply with either:
 Private Entity Reporting Standards (PERS) in their entirety for financial
statements with annual periods beginning before 1 January 2016; or
 Malaysian Private Entities Reporting Standards (MPERS) in their entirety
for financial statements with annual periods beginning on or after 1
January 2016; or
 MFRS in their entirety.
Private entities are defined as private companies incorporated under the
Companies Act 1965 that:
(a) are not required to prepare / lodge any financial statements under any law
administered by the SC or BNM; and
(b) are not a subsidiary / associate of / jointly controlled by an entity which is
65
EMPLOYEES’ PROVIDENT FUND
required to prepare / lodge any financial statements under any law
administered by the SC or BNM.
EMPLOYEES’ PROVIDENT FUND
Scope of EPF
The Employees’ Provident Fund (EPF) is a compulsory savings scheme
established to provide a measure of security for old age retirement to its
members.
Expatriates and foreign workers, who are not Malaysian citizens or
permanent residents are not required to contribute to EPF although they may
elect to do so.
Rates of contributions
The statutory rates of contributions are as follows:
Malaysian citizens and
Expatriates and foreign
permanent residents
workers
(mandatory)
% of contribution of employee’s wages (minimum)
Employer
Employee
Employer
Employee
Till age 60
Income >
12%
RM5,000
11%
Income ≤
13%
RM5,0002
Age 60 and above, till 75 (From 1 February 2008)
Income >
6%1
RM5,000
5.5%1
Income ≤
6.5%1
2
RM5,000
1
2
RM5 per
person
11%
RM5 per
person
5.5%
Exceptions:
EPF monthly rate of contributions is maintained at 12% (employer’s share) and 11%
(employee’s share) under the following circumstances:
i. Employees who have attained the age of 55 years before 1 February 2008 and have not
made 55 years withdrawal before 1 February 2008;
ii. Employees who have made 55 years withdrawal before 1 February 2008 and have
elected to re-contribute to EPF before 1 February 2008.
If the employer pays bonus to an employee who receives monthly wages of RM5,000.00 and
below and upon receiving the said bonus renders the wages received for that month to exceed
RM5,000.00, the calculation of the employer contribution rate shall be calculated at the rate of
13% / 6.5%, and the total contribution which includes cents shall be rounded to the next
ringgit.
66
EMPLOYEES’ PROVIDENT FUND
Effective 3 January 2010, the 1Malaysia Retirement Saving Scheme was
introduced to allow self-employed and individuals without fixed monthly
income to contribute voluntarily based on the amount that they can afford.
Members’ accounts
Effective 1 January 2007, the EPF account is divided into 2 parts:
Account I - for retirement purposes at age 55
Account II - for housing, education, medical, Hajj and
withdrawal at age 50
% of contributions
70
30
Withdrawals
EPF members are entitled to withdraw the full amount of contributions:
- upon the death of the member (withdrawal made by beneficiary(ies));
- on attaining the age of 55 years;
- if the member is prevented from engaging in any further employment by
reasons of physical or mental incapacitation;
- on leaving Malaysia permanently (for non-Malaysian or Malaysian citizens
who have revoked or renounced their citizenships);
Under Account 2, members are entitled to withdraw for:
- the purchase or construction of a residential house or for purposes of
reducing a housing mortgage on satisfying the prescribed conditions;
- on attaining the age of 50 years;
- purchase of a second house on condition that the first house is sold;
- reduction or settlement of housing loan balance;
- for housing loan repayment (withdrawal on a monthly basis) for one house;
- setting aside part of savings to enable member to obtain a higher housing
loan amount under the flexible housing withdrawal scheme;
- further education for self and children’s tertiary education;
- medical expenses incurred for the treatment of critical illnesses for
themselves and their families;
- finance part of the cost of Hajj (up to RM3,000) by eligible Muslim EPF
members (effective 1 January 2013)
Alternatively, members may choose to withdraw under the “Retirement
Periodical Payment Scheme” upon reaching the age of 55 years. Withdrawal
payment can be made in part lump sum and part monthly periodical payment
or monthly periodical payments for all savings.
67
EMPLOYMENT GUIDELINES
Members at any time before reaching 55 years can make the withdrawal from
savings exceeding RM1 million, subject to a minimum of RM50,000 at every
interval of 3 months.
Members who have reached 55 years and have not withdrawn all of their
savings, can withdraw the annual dividend of their savings.
Effective 1 February 2008, members can invest not more than 20%, (subject
to minimum withdrawal of RM1,000 at 3 months interval) of their credit in
excess of Basic Savings in Account 1 in approved external funds. The
required Basic Saving in Account 1 varies according to age, ranging from a
minimum of RM1,000 for members at age 18 to RM120,000 at age 55.
EMPLOYMENT GUIDELINES
Guidelines for employment of expatriates
Approvals for expatriate posts are given by different authorized bodies or
agencies depending on the type of core business of the company. The MIDA
approves expatriate posts in the following fields:
 Manufacturing
 Manufacturing related services – Regional Office, OHQ, IPC, Overseas
Mission, etc
 Hotel and tourism industry
 Research and Development
The guidelines on employment of expatriate personnel issued by MIDA, are
as follows:
 For manufacturing companies with foreign paid up capital of:
(a) USD2 million and above:
-
Automatic approval for up to 10 expatriate posts including 5 key
posts, (top management post) for durations of up to 10 years for
executive posts and 5 years for non-executive posts.
(b) above USD200,000 but less than USD2 million:
-
Automatic approval for up to 5 expatriate posts including at least 1
key post (top management post), for durations of up to 10 years for
executive posts and 5 years for non-executive posts.
(c) less than USD200,000:
-
Consideration is given (based on merits of each case) for key posts
where foreign paid-up capital is at least RM500,000. Time/Term
68
EMPLOYMENT GUIDELINES
posts can be considered for up to 10 years for executive posts
requiring professional qualifications and experience and 5 years for
non-executive posts that require technical skills and experience.
 For Malaysian-owned manufacturing companies:
-
Approval is given upon request (application), for employment of
expatriates for technical posts, including R&D posts.
Other approving agencies for expatriate post:
 Multimedia Development Corporation (MDeC) - for expatriate posts and
skilled workers in IT based companies with MSC status
 Public Service Department (PSD) – doctors and nurses in government
hospitals and clinics; lecturers and tutors in government institutions of
higher learning; contract posts in public services and jobs offered by Public
Service Commission or related government agencies
 Central Bank of Malaysia (BNM) – posts in banking, finance and insurance
sectors
 Securities Commission (SC) – employment in Security and Share market
 Expatriate Committee (EC) – employment in sectors other than the above
The employment of Malaysian nationals at all levels should, wherever
possible, reflect the multi-racial composition of the country.
The following minimum paid-up share capital requirement must be fulfilled
before an application of expatriate position can be processed by the EC:
100% Malaysian owned company
Malaysian and Foreign owned company
100% Foreign owned company
RM
250,000
350,000*
500,000
* If the applied post is a key post, foreign capital in the company must be at least RM500,000.
Minimum salary of the expatriate employee is RM5,000 per month.
Employment of foreign workers
Employment of foreign workers is subject to conditions which are determined
from time to time and will be considered after failing to find qualified local or
permanent residents.
Employment of foreign workers are allowed in the manufacturing,
construction, plantation, agricultural, domestic help sectors and 3 services
sub sectors i.e. restaurants, cleaning and sanitation, resort island.
69
EMPLOYEES’ SOCIAL SECURITY FUND
Nationals from the following countries are allowed to work in the specified
sectors:
Nationals of
Indonesia (female only), Cambodia,
Laos, Myanmar, Nepal, Pakistan,
Philippines (male only), Sri Lanka,
Thailand, Vietnam, Turkmenistan,
Uzbekistan, Kazakhstan
Indonesia (male only)
Approved Sector
Manufacturing, construction,
plantation, agricultural and
services sectors
Same as above excluding
manufacturing
Services (restaurant only);
Construction (fixing of high voltage
cable only); Agriculture; and
Plantation
India
An annual levy is imposed on employers of foreign workers. The rate of levy
varies according to the category of worker.
The One Stop Centre in the Ministry of Home Affairs handles applications for
foreign workers except for application for domestic helpers which are
processed by the Immigration Department.
EMPLOYEES’ SOCIAL SECURITY FUND
Scope of SOCSO
The Social Security Organisation (SOCSO) administers the following
schemes:
 Employment Injury Insurance Scheme;
 Invalidity Pension Schemes.
These schemes are aimed at providing cash and medical benefits to
employees in case of temporary or permanent disablement/invalidity, death
and employment injury, including occupational diseases.
All employees with monthly wages of RM3,000 or less are covered by the
schemes. Any employee falling within the schemes will continue to remain
within the schemes notwithstanding that his or her monthly wages may
subsequently exceed the threshold of RM3,000.
Rates of contributions
The rates of contributions are as follows:
 The first category (Employment Injury Insurance Scheme and Invalidity
70
EMPLOYEES’ SOCIAL SECURITY FUND
Pension Scheme) of contribution is by both the employer and employee,
restricted to a maximum of RM51.65 and RM14.75 respectively.
Applicable to employees below age of 60 years effective 1 January 2013.
 The second category (Employment Injury Insurance Scheme only) of
contribution is solely by the employer for an employee who is not eligible
for coverage under the Invalidity Pension Scheme, restricted to a
maximum of RM36.90. Applicable to employees aged 60 years and above
effective 1 January 2013.
 Employees who earn more than RM3,000 and who have never registered
nor contributed may choose to register and contribute, provided that both
employer and employee are agreeable.
With effect 1 January 2013, the age limit for first time employees contributing
under the Invalidity Scheme has been changed from before reaching the age
of 50 to before reaching the age of 55 and will no longer be eligible when an
employee reaches the age of 60.
The qualifying/eligible age of for Invalidity Scheme has been amended as
follows:
1.
When an employee first contributed under the First Category and have
yet to reach the age of 55 when the Act was gazetted, he shall continue
to contribute under the First Category. Upon reaching the age of 60 he
shall contribute under Second Category.
2.
When an employee first contributed under the First Category and
continued to contribute under Second Category upon reaching the age of
55 but have yet reach the age of 60 when the Act was gazetted, he shall
contribute under First Category. Upon reaching the age of 60 he shall
contribute under Second Category.
3.
When the employee first contributed under Second Category and have
yet to reach the age of 55 when the act was gazetted, he shall contribute
under First Category. Upon reaching the age of 60 shall contribute under
Second Category.
4.
When the employee first contributed under Second Category and have
reached the age of 55 when the Act was gazetted, he shall continue to
contribute under the Second Category.
When the employee first join the company at the age of 55 when the act
is gazetted and has not contributed under any Category, he shall
contribute under Second Category.
5.
71
HUMAN RESOURCES DEVELOPMENT FUND
HUMAN RESOURCES DEVELOPMENT FUND (HRDF)
Scope of HRDF
The HRDF is aimed at helping the manufacturing, services and transportation
sectors to develop the technical skills of their employees through involvement
in training schemes.
Effective 1 June 2014 there is an expansion of the scope of coverage of the
HRDF to 19 new subsectors, which are 2 subsectors in mining and quarrying
sector and 17 in the service sector.
Employers engaged in the following activities must register and contribute to
the HRDF:
Type of activity
 Manufacturing
 Manufacturing with a paid-up capital of RM2.5
million or more
 Manufacturing with a paid-up capital of less than
RM2.5 million
 Mining and quarrying (petroleum and gas extraction;
mineral and stone quarrying)
 Mining and quarrying (petroleum and gas extraction;
mineral and stone quarrying) with a paid-up capital
of RM2.5 million or more
 Mining and quarrying (petroleum and gas extraction;
mineral and stone quarrying) with a paid-up capital
of less than RM2.5 million
 Service sector
(hotel industry; air transport services; tour operators
and travel agencies; telecommunications; freight
forwarders; shipping; postal/courier services;
advertising; computer services; energy; training;
higher education; direct selling; port services;
engineering support and maintenance services;
research & development; warehousing services;
security services; private hospital services; gas,
steam and air-conditioning supply; water treatment
and supply; sewerage; waste management and
material recovery services; production of motion
picture, video and television programme, sound
recording and music publishing; information service;
tourism enterprise; building and landscape services;
event management; early childhood education;
72
No. of employees
50 or more
10 to 49
10 to 49*
50 or more
10 to 49
10 to 49*
10 or more
HUMAN RESOURCES DEVELOPMENT FUND
Type of activity
No. of employees
health support services, franchise; sale and repair of
motor vehicles; private broadcasting services;
driving school; and veterinary services)
30 or more
 Service sector
(food and beverage services)
50 or more
 Service sector
(hypermarket, supermarket and departmental store
services)
* Such employers have the option to contribute to the HRDF at the rate of 0.5% of the
employees’ monthly wages.
The 19 new subsector employers, who register within the Special Period from
1 June 2014 until 30 November 2014, will be entitled to exemption from the
payment of levy and interest until 30 November 2014; and other incentives or
benefits provided by HRDF for registered employers.
Rates of contribution
 1% of employees’ monthly wages on a monthly basis for all employers
except for small employers under manufacturing sector, mining and
quarrying sector.
 0.5% rate for small employers under the manufacturing sector, mining and
quarrying sector.
Financial assistance
An employer who has paid the levy upon registration is eligible to receive
financial assistance at rates ranging from 50% to 100% of the allowable costs
incurred for the purpose of training employees under various training
schemes including the following:
-
SBL (Skim Bantuan Latihan) and Special SBL Scheme;
PROLUS (Program Latihan yang Diluluskan);
PLT (Pelan Latihan Tahunan);
PERLA (Perjanjian Latihan Dengan Penyelia Latihan);
Computer-based training Scheme (Software Development);
Apprenticeship Training Schemes;
Joint Training Scheme;
Information Technology and Computer-Aided Training;
Purchase of Training Equipment and Setting Up of Training Room
Scheme;
English Language Programs for workers under the HRDF;
73
FOREIGN AND BUMIPUTRA EQUITY PARTICIPATION
-
SME On-The-Job Training;
SME Training Partners Scheme (SMETAP);
Accreditation of Prior Achievement scheme (APA).
FOREIGN AND BUMIPUTRA EQUITY PARTICIPATION
The foreign equity participation rules in Malaysia have been gradually
liberalised through the years. Examples of industry sectors liberalised are as
follows:-
 Manufacturing - Equity holdings were fully liberalised from 17 June 2003
whereby 100% foreign participation is allowed. However, any equity and
export conditions imposed prior to 17 June 2003 continue to apply.
Request for removal of these conditions may be made depending on the
merits of each case.
 Financial services - The limit on foreign equity ownership of investment
banks, Islamic banks, insurance companies and takaful operators was
raised from 49% to 70% in 2009. From 9 June 2014, 100% foreign equity
ownership is allowed for unit trust management companies and new foreign
unit trust management companies may also enter Malaysia. For credit
rating agencies, equity shareholdings will be liberalised from 1 January
2017. Fully foreign owned international credit rating agencies may also
enter Malaysia from that date.
 Services - the liberalisation of several services sub-sectors was announced
over the course of the last 5 years allowing for 100% foreign participation.
In addition, the Foreign Investment Committee no longer imposes the
requirement of at least 30% Bumiputra equity following the repeal of the
revised Guidelines for the Acquisition of Interest, Mergers and Takeovers by
Local and Foreign Interests on 30 June 2009.
Regulators in strategic sectors such as water, telecommunications, ports and
energy will however continue to impose Bumiputra equity conditions as seen
fit, in light of national interest.
EXCHANGE CONTROL
Seven notices were issued under the Financial Services Act 2013 (FSA) and
the Islamic Financial Services Act 2013 (IFSA) to set out the rules for
exchange control in Malaysia.
74
EXCHANGE CONTROL
Some of the more common transactions dealt with under the notices are as
follows:
Remittances abroad
A resident is freely permitted to:
 Make payment in Ringgit* to non-residents for - settlement of a Ringgit asset including any income and profit due from
the Ringgit asset;
- settlement of domestic and international trade in goods and services;
- income earned or expense incurred in Malaysia;
- settlement of a commodity murabahah transaction between a resident
and non-resident participant undertaken through a resident commodity
trading service provider;
- settlement of reinsurance for domestic insurance business or retakaful
for domestic takaful business between a resident and a person
licensed to undertake Labuan insurance or takaful business;
- settlement of a Ringgit denominated non-financial guarantee issued by
a person licensed to undertake Labuan banking business in favour of a
resident; or
- any purpose between immediate family members.
* Payment in Ringgit must be made into an external account of the nonresident or an external account of a non-resident financial institution

Make payment in foreign currency to non-residents for any purpose
(other than derivatives), including settlement of import of goods and
services and payment to non-resident immediate family members (for
any purpose);

Buy or sell foreign currency against another foreign currency with
licensed onshore banks for any purpose.

Buy or sell Ringgit against foreign currency with a licensed onshore
bank (other than an international Islamic bank) on spot or forward basis
for current account transactions or financial account transactions based
on firm commitment or anticipatory basis.

Make payment in foreign currency to resident company for
settlement of domestic trade in goods and services provided the
foreign currency funds are sourced from the resident payer’s (with
export earnings) foreign currency accounts.
75
EXCHANGE CONTROL
Investment in foreign currency assets by a resident
A resident (entity, individual, sole proprietor or general partnership) without
domestic Ringgit credit facilities is free to invest any amount abroad.
A resident entity with domestic Ringgit facilities may invest any amount
abroad from conversion of Ringgit up to RM50 million per annum (RM50
million is determined based on aggregate borrowing of entities within its
group of entities or direct shareholder**).
A resident individual, sole proprietor or general partnership with
domestic Ringgit facilities may invest any amount abroad from conversion of
Ringgit up to RM1 million per annum.
**’Direct shareholder’ means a shareholder with at least 10% shareholding in a
resident entity.
Purchase of immoveable properties by non-residents
Non-residents may borrow domestically for financing properties used for
productive (real) activities such as manufacturing in Malaysia.
Non-residents are permitted to borrow any amount of Ringgit credit facilities
from residents to finance the purchase or construction of any residential or
commercial property in Malaysia (excluding financing for purchase of land
only).
Borrowings in foreign currency by a resident
A resident entity is free to:
 borrow any amount in foreign currency from licensed onshore banks or
from its resident or non-resident entities within its group of entities or direct
shareholder or through issuance of foreign currency debt securities to
another resident.
However, where a non-resident special purpose vehicle is set up solely to
obtain borrowings from any person which is not part of the resident entity’s
group of entities, the prevailing aggregate limit of RM100 million equivalent
continues to apply.
 obtain up to RM100 million equivalent in aggregate from other nonresidents or a non-resident financial institution for other financing
activities.
A resident individual, sole proprietor or general partnership is free to
borrow up to RM10 million equivalent in aggregate from a licensed onshore
bank or a non-resident. Notwithstanding this, any amount of foreign currency
may be borrowed from an individual’s immediate family member.
76
EXCHANGE CONTROL
A resident is free to refinance outstanding approved borrowing in foreign
currency (including principal and accrued interest).
Borrowings in Ringgit by a resident
A resident entity is allowed to borrow in Ringgit, including through the
issuance of tradable Ringgit private debt securities or Islamic private debt
securities:- from its non-resident entity within its group of entities or direct shareholder
to finance activities in the real sector (defined) in Malaysia; or
- up to RM1 million in aggregate from other non-residents for use in
Malaysia.
However where a non-resident special purpose vehicle is set up solely to
obtain borrowings from any person which is not part of the resident entity’s
group of entities or direct shareholder, the prevailing aggregate limit of RM1
million on Ringgit borrowings from non-residents continue to apply.
A resident individual, sole proprietor or general partnership is allowed to
borrow in Ringgit up to RM1 million in aggregate from any non-resident other
than a non-resident financial institution for use in Malaysia. Notwithstanding
this, Ringgit may be borrowed from an individual’s non-resident immediate
family member or an individual’s non-resident employer in Malaysia (subject
to employment terms).
Ringgit borrowings obtained by residents are allowed to be converted (i.e.
swapped) to foreign currency debt obligation with a licensed onshore bank
(other than a licensed international Islamic bank), provided that the rules on
foreign currency borrowings obtained by residents are complied with.
Foreign currency accounts
In general, a resident is allowed to open foreign currency accounts with
licensed onshore banks or non-resident financial institutions.
A resident individual is allowed to maintain for any purpose, individual or joint
foreign currency accounts with another resident individual and also with a
non-resident individual who is an immediate family member.
Non-resident’s accounts
A non-resident may open and maintain an external account with any financial
institution in Malaysia. There is no restriction on the amount of Ringgit funds
to be retained in the external account.
Funds in the external account may be used for the payment to a resident for
77
EXCHANGE CONTROL
own account for transactions such as:
- purchase of Ringgit assets or payment for goods and services in
Malaysia;
- converting Ringgit into foreign currency with a licensed onshore bank
for repatriation abroad.
Import and export of currency
A resident and non-resident traveller is free to import or export Ringgit notes
up to USD10,000.
Dealing with Israel and the currency of Israel
A resident or a non-resident in Malaysia is not allowed to undertake or
engage in any dealing or transaction with Israel or any dealing or transaction
involving the currency of Israel without Bank Negara Malaysia’s approval.
Exports from Malaysia
Resident exporters are required to submit quarterly reports on their export
related transactions if the gross export proceeds exceed RM50 million per
year.
Issuance of securities
Residents are permitted to issue any securities provided that the issuance of
debt securities to non-residents are subject to the prevailing rules on
borrowing from non-residents.
Non-residents are permitted to issue foreign currency securities in Malaysia.
Labuan entities
Effective from 30 June 2013, all Labuan entities are automatically declared as
non-residents for foreign exchange control purposes. All foreign exchange
rules applicable to a non-resident will apply to a Labuan entity.
Special status companies
Special status companies, for example, approved operational headquarters,
treasury management companies, MSC Malaysia companies are granted
additional flexibilities.
Please refer to Bank Negara Malaysia’s website at www.bnm.gov.my for
more information on exchange control matters.
78
IMPORTANT FILING/FURNISHING DATES
IMPORTANT FILING/FURNISHING DATES
Type of return
Form
Income tax
All taxpayers
Notification of change of
CP600B
address
Individual (without business income)*
Notification of
No
chargeability of an
prescribed
individual who first arrives
form
in Malaysia
Submission of income tax
return*
- Resident
BE/BT**
- Non-resident
M/MT**
Due date
Within 3 months of
change
Within 2 months of date
of arrival
By 30 April in the year
following that YA
* W.e.f YA 2014, tax returns are not required to be filed for specific groups of
employees where requirements are met. MTD will be final tax.
Individual (with business income)
Submission of income tax
return
- Resident
B/BT**
- Non-resident
M/MT**
By 30 June in the year
following that YA
** Forms for knowledge workers (Refer to Personal Income Tax section)
Company
Submission of estimate of
tax payable
Submission of revised
estimate of tax payable
Submission of income tax
return (must be prepared
based on audited
accounts w.e.f YA 2014)
Furnishing of particulars
of payment made to
agent, dealer & distributor
Deceased Person’s Estate/
Body of Persons
CP 204
CP 204A
C
30 days before the
beginning of the basis
period
In the sixth or/and ninth
month of the basis period
Within 7 months from the
date following the close of
its accounting period
CP58
By 31 March of the
following year
TP/TF/TJ
By 30 April (without
business income) or 30
June (with business
income) in the year
following that YA
79
IMPORTANT FILING/FURNISHING DATES
Type of return
Form
Due date
Partnership
P
Limited Liability Partnership
PT
Co-operative society
Trust Body
Unit Trust
Business Trust
Real Estate Investment
Trust/ Property Trust Fund
Employer
Return of remuneration by
an employer
Statement of
remuneration of employee
Notification of employee’s
commencement of
employment
Notification of employee’s
cessation of employment
(in certain prescribed
cases)
Notification of employee
leaving Malaysia for more
than 3 months
Statement of tax
deduction by employer
under Monthly Tax
Deduction Scheme
Withholding tax
Interest or royalty to nonresidents
C1
TA
TC
TN
TR
By 30 June in the year
following that YA
Within 7 months from the
date following the close of
its accounting period
Same as above
Same as above
Same as above
Same as above
Same as above
Contract payments to nonresident contractors
Technical and management
service fees, rental of
moveable properties, etc. to
non-residents
CP 37A
Within one month of
paying or crediting the
non-resident, whichever
is earlier
Same as above
CP 37D
Same as above
E
EA
CP 22
CP 22A
CP 21
CP 39
CP 37
80
By 31 March of the
following year
By last day of February of
the following year
Within one month of
commencement of
employment
Not less than one month
before cessation
Not less than one month
before expected date of
departure
Within 10 days after
month end
IMPORTANT FILING/FURNISHING DATES
Type of return
Form
Due date
Technical and management
services fees, rental of
moveable properties, etc. to
non-residents carrying out
activities in the Joint
Development Area
Real Estate Investment Trust
income exempted at the Trust
level distributed to unit holders
(other than resident
companies)
Family fund, family re-Takaful
fund or general fund income
distributed to participants
Payments to a non-resident
person in relation to any gains
or profits falling under Section
4(f)
Withdrawal of contribution
from a private retirement
scheme fund
Real property gains tax
Return of disposal of real
property / shares in real
property company
CP 37D (1)
Same as above
37E
Within one month of
distributing income to the
unit holders
37E(T)
Within one month of
distributing income to the
participants
Within one month of
paying or crediting the
non-resident, whichever
is earlier
Within one month of
paying the amount
CKHT 1A/1B
& CKHT 3
(if applicable)
Return of acquisition of real
property / shares in real
property company
CKHT 2A &
CKHT 502
(if applicable)
Sales tax
Submission of tax return
CJP 1
Within 28 days after end
of each taxable period
Service tax
Submission of tax return
CJP 1
Within 28 days after end
of each taxable period
37F
37G
Within 60 days after
disposal of real property /
shares in real property
company
Within 60 days after
acquisition of real
property / shares in real
property company
Goods and services tax (GST)
GST registration (refer to page 55 on requirement for a person to register)
Existing business
GST-01
31 December 2014
New business (annual
GST-01
28 days from the end of
turnover exceeds or
the month the annual
expected to exceed the
turnover exceeded or is
81
IMPORTANT FILING/FURNISHING DATES
Type of return
threshold after 1 April
2015)
GST return
Form
GST-03
Social Security Organisation (SOCSO)
Submission of remittance form
8A
Employees’ Provident Fund
Schedule of Monthly
contributions together with
cheque
EPF 6
(Form A)
82
Due date
expected to exceed the
threshold
Last day of the month
following the end of the
taxable period OR
30 days from the end of
the taxable period (where
taxable period is varied)
Not later than last day of
the following month
Within 15 days after
month end for each
month
PwC in Malaysia
Telephone/Telecopier
Mail Address
Tax Contacts
Kuala Lumpur
Level 10, 1 Sentral
Jalan Travers
Kuala Lumpur Sentral
50470 Kuala Lumpur
Telephone:
[60] (3) 2173 1188
Telecopier:
[60] (3) 2173 1288
PO Box 10192
50706 Kuala Lumpur
Jagdev Singh
Telephone:
[60] (3) 2173 1188
Pulau Pinang
16th Floor,
Bangunan KWSP
Jalan Sultan Ahmad Shah
10050 Pulau Pinang
Telephone:
[60] (4) 238 9188
Telecopier:
[60] (4) 238 9288
PO Box 856
10810 Pulau Pinang
Tony Chua
Telephone:
[60] (4) 238 9188
Ipoh
Standard Chartered Bank Chambers
1st Floor, 21-27
Jalan Dato’ Maharaja Lela
30000 Ipoh
Perak Darul Ridzuan
Telephone:
[60] (5) 254 9545
Telecopier:
[60] (5) 253 2366
PO Box 136
30710 Ipoh
Perak
Tony Chua
Telephone:
[60] (4) 238 9188
Melaka
Level 15-1, Tower B
Jaya 99
99, Jalan Tun Sri Lanang
75100 Melaka
Telephone:
[60] (6) 283 6169
Telecopier:
[60] (6) 284 4368
PO Box 140
75720 Melaka
Teh Wee Hong
Telephone:
[60] (3) 2173 1188
Au Yong
Telephone:
[60] (6) 283 6169
Johor Bahru
Menara Ansar
Level 16, Jalan Trus
80000 Johor Bahru
Johor Darul Takzim
Telephone:
[60] (7) 222 4448
Telecopier:
[60] (7) 224 8088
PO Box 296
80730 Johor Bahru
Johor
Benedict Francis
Telephone:
[60] (7) 222 4448
Labuan
Level 13F, Main Office Tower
Financial Park Labuan
Jalan Merdeka
87000 Wilayah Persekutuan Labuan
Telephone:
[60] (87) 42 2088
[60] (87) 42 1618
Telecopier:
[60] (87) 42 2198
Level 13F,
Main Office Tower
Financial Park Labuan
Jalan Merdeka
87000 Wilayah
Persekutuan Labuan
Jennifer Chang
Telephone:
[60] (3) 2173 1188
Visit our website at http://www.pwc.com/my
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twitter.com/PwC_Malaysia
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www.pwc.com/my
© 2014 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” and/or “PwC” refers to the individual members of the
PricewaterhouseCoopers organisation in Malaysia, each of which is a separate and independent legal entity. Please see www.pwc.com/
structure for further details. CS07196